Event: semi-annual report 2011: in the first half of 2011, the company achieved operating income of 3.325 billion yuan, an increase of 64.51% over the same period last year. The operating profit reached 210 million yuan, an increase of 389.45% over the same period last year. The net profit attributed to the owner of the parent company was 159 million yuan, an increase of 332.12% over the same period last year.

Comments: heroic Mining is expected to start production in the second half of the year. Qingdao Haojie Mining Co., Ltd. has now completed the construction of the concentrator and completed the load commissioning. 75% of the total volume of underground engineering has been completed. Although the geological structure of underground strata is complex and the construction period is delayed due to the safety inspection of mine construction, the project is likely to be put into production in the second half of the year. The project is a mining project with an annual output of 200000 tons of iron fine powder, which will become an important profit growth point for the company after it is put into production.

Yantai Wanrun performance is growing rapidly. The profit of Yantai Wanrun, a shareholding company, increased significantly compared with the same period last year. In the first half of 2011, the company recognized investment income of 20.5043 million yuan, an increase of 36.44% over the same period last year. The company participates in Yantai Wanrun and holds a 26.58% stake in the company. The company has now declared IPO and is more likely to be approved.

The real estate business is the main source of profit growth. The Jinan Lubang Galaxy Building of Lupang Real Estate, a subsidiary of the company, was sold at a price of 660 million, with an operating profit of 172 million. The project has become the main source of profits for the company in 2011. Another of the company's real estate projects, Lubon style Street, is expected to open in August 2011 and will contribute to the company's performance in 2012.

Profit forecast and investment advice: we expect the company's EPS to be RMB0.93,1.02 and RMB1.05 respectively in 2011, 2012 and 2013. According to the 2011 EPS and the price-to-earnings ratio of various industries, the reasonable share price of the company is 20.15 yuan, with a "buy" rating.