Ningbo-Zhoushan Port is the core area of the “Zhejiang Marine Economic Development Demonstration Zone Plan” and will establish a port and shipping logistics service system related to commodity trading platforms. As a key water transport enterprise in Zhejiang Province and the largest shipping enterprise in Ningbo, we believe that the company will benefit from the increase in dry bulk cargo volume and variety in the long term. The COA contract guarantees the optimization of supply and fleet structure, and is expected to increase water transportation turnover by 11.0% in 2011: according to the Zhejiang Electric Power Development Plan, 10 million kilowatt thermal power generators will be added to the current level by 2020, and the annual demand for electricity and coal is expected to exceed 10,000 million tons. The company guarantees supplies by signing COA contracts with major customers. Currently, electricity and coal traffic accounts for about 15% of the province, so we think there is a lot of room for growth in the future. The company is committed to optimizing its fleet structure. It is expected that it will add 270,000 dwt capacity from 2011 to 2012, accounting for about one-third of the current fleet capacity, while also withdrawing some old ships. We expect the company's water transportation turnover to increase by about 11.0% in 2011. The fuel surcharge clause in the COA contract will offset some of the increase in fuel costs, and the average freight rate level is expected to increase slightly compared to 2010. The road network effect has contributed to rapid traffic growth, and toll revenue is expected to increase by more than 25% in 2011: In the first quarter of 2011, toll revenue for the western section of the Ningbo City-Bypass Expressway operated by the company increased 24.8% year-on-year, mainly due to the increasingly improved road network, the construction of a precise split toll system, and the implementation of weighted toll policies. We expect the company's annual toll revenue to increase by more than 25.0%. With the completion of the eastern section of the Ningbo City-Bypass Expressway at the end of 2011, we believe that the network benefits of the company's road production will expand, and toll revenue is expected to increase further. On July 8, 2011, the convertible bonds entered the convertible period, and it is expected that there will be no dilution impact on performance in the short term: on July 8, 2011, the 720 million yuan convertible bonds issued by the company entered the convertible period. If calculated at a convertible price of 4.54 yuan/share, the total stock conversion would increase the company's total share capital by about 159 million shares, accounting for about 18.2% of the current total share capital. Currently, the debt conversion premium rate is about 14%. Since arbitrage space is negative and there is still a long time until the convertible maturity date of January 7, 2016, we expect convertible bond holders to continue to hold bonds in the short term without being in a hurry to convert shares, so there is no dilution impact on performance. For the first time, an “increase in holdings” rating was given: regardless of debt-for-equity dilution, we forecast the company's EPS for 2011-2013 to be 0.13, .019, and 0.28 yuan, respectively. Given the company's good growth potential, revenue from the water transport business and road production business is expected to grow steadily. For the first time, we gave the company an “increase in holdings” rating for the first time, with a target price of 5.60 yuan for 12 months. Risk warning: economic downturn, declining transportation demand, lower freight rates than expected, excessive fuel prices, etc.