In the first quarter of 2010, the company achieved operating income of 251 million yuan, an increase of 35.71%; operating profit of 24.5018 million yuan, an increase of 14.66%; net profit attributable to the parent company of 16.62 million yuan, an increase of 16.44% over the previous year; and realized earnings of 0.04 yuan per share. Overview of the company's fundamentals: The company is transforming into the first listed financial company around the development strategy of “class finance as the lead, trade and real estate as the two wings”; its main subsidiaries include Xiangyi Financial Union, which holds 70% of the shares, Xiangyi Guarantee, 90% of the shares, Xiangyi Leasing, which holds 90% of the shares, and Yuantai Pawn, which holds 82% of the shares; in 2008, companies affected by the economic downturn revealed a large number of problematic loans. Currently, the company's private offering raised 1.5 billion yuan for leasing and leasing and guarantee business. The increase in commercial business revenue is the main reason for the company's revenue. The main business revenue for the first quarter of 2010 was 238 million yuan, an increase of 38.43% over the previous year. Since commercial business revenue accounted for more than 90% of total revenue, the country's import and export trade achieved a year-on-year increase in the first quarter, and the company's trade business revenue benefited from this. Therefore, we infer that the increase in operating income was mainly due to the increase in trade business revenue. The scale of the pawnbroking business has begun to expand, and future development can be expected. In the first quarter of 2010, the company's pawnbroking business began to resume growth, although interest income fell 12.75% year on year to 109.886 million yuan. However, the size of corporate loans increased to 941 million yuan, an increase of 39.61% over the end of 2009. The share of normal loans at the end of the first quarter of 2010 was 81.61%, up about 7 percentage points from the end of 2009, and the share of questionable loans fell 7 percentage points to 18.27%. Asset impairment losses in the first quarter of 2010 were 6592 million yuan. As the company continues to improve its pawnbroking risk control system, the gradual recovery of the future economy and the gradual improvement of the conditions of loan companies, the pawnbroking business is expected to re-enter the path of rapid growth after experiencing this sharp decline. Furthermore, the sharp expansion in the scale of bank loans in 2009 also affected the development of pawnbroking business. With bank loan policies being tightened in 2010, the business environment of pawnbroking business will improve somewhat. Profit forecast and rating: We predict that the company's net profit attributable to the parent company in 2010-2012 will be 60.81 million yuan, 66.75 million yuan and 76.77 million yuan respectively, and the corresponding EPS will be 0.13 yuan, 0.15 yuan and 0.17 yuan respectively. Based on the closing price of 12.38 yuan on April 29, dynamic PE is 92 times, 84 times and 73 times respectively. The valuation is high, maintaining the company's “neutral” investment rating.