In 2010, the company achieved operating income of 2.307 billion yuan, up 1.32% from the same period last year; operating profit of 240 million yuan, down 10.84% from the same period last year; net profit belonging to the owner of the parent company was 200 million yuan, down 14.01% from the same period last year; and earnings per share was 0.19 yuan (diluted according to the latest equity). The profit distribution plan is 0.50 yuan for every 10 shares.

In the first quarter of 2011, the company achieved operating income of 447 million yuan, an increase of 0.13% over the same period last year; operating profit of 48 million yuan, an increase of 33.99% over the same period last year; net profit belonging to the owner of the parent company was 40.88 million yuan, up 38.95% from the same period last year; and earnings per share was 0.04 yuan.

The company is a leading enterprise in the distribution industry located in Shanghai, and its main business includes newspapers and advertisements, book distribution and stationery sales. Among them, newspaper advertising and book distribution business accounted for 51.61% and 37.71% of the business income respectively, which are the main sources of income of the company. In 2010, the company's main business grew slightly, of which the book distribution business increased by 8.33% compared with the same period last year. In 2010, the company opened 8 new stores with an area of nearly 5000 square meters. at the same time, the company has obtained the total distribution right of teaching materials for full-time schools in the city, and the book distribution business of the company is growing well. The decline in the company's net profit in 2010 is mainly due to: 1) the increase in the expense rate during the company period is higher than the comprehensive gross profit margin; 2) the asset impairment loss is 40.63 million yuan, an increase of 198.21% over the same period last year. In the first quarter of 2011, the company's net profit increased significantly due to a decline in the company's expense rate and asset impairment loss compared with the same period last year, while investment income increased by 27.79% compared with the same period last year.

The expense rate fluctuated during the period. In 2010, the company's period expense rate was 23.72%, up 1.56 percentage points from the same period last year. In the first quarter of 2011, the company's period expense rate was 25.57%, down 1.59 percentage points from the same period last year. In 2010, due to the company's issuance of 800 million yuan in short-term financing bonds, interest expenses increased significantly, and the company's financial expense rate increased by 1.10% compared with the same period last year. In the first quarter of 2011, the company confirmed the interest income on the financial aid of Chengcheng project, and the financial expense rate decreased by 1.24% compared with the same period last year.

The Chengcheng real estate project is expected to increase the value of the company. Chengcheng real estate project is located in Shanghai Hongqiao Business District, with a floor area of about 280000 square meters, which has previously become an unfinished building project due to huge debts and land use rights. In October 2010, the company transferred 70 per cent of the rights and interests of the Chengcheng real estate project at a symbolic price of HK $1 and financial assistance of 1.32 billion yuan. In April 2011, the company introduced a new investor, Red Star Group. Hongxing Group is a household chain enterprise with high-quality financing platform and rich experience in real estate development. With the entry of Hongxing Group, the probability of solving the problem of land use right of Chengcheng real estate project has been greatly increased. According to the prices of commercial real estate around the area, Chengcheng project has more room for value-added in the future.

Earnings forecast: we expect the company's earnings per share from 2011 to 2013 to be 0.22,0.23,0.25yuan respectively. According to the closing price of 7.31yuan on April 28th, the corresponding dynamic price-to-earnings ratio is 33 times, 31 times and 30 times respectively. In view of the fact that the company's real estate projects have more room for appreciation, the company's investment rating has been upgraded to "overweight".