The company's performance in 2010 fell slightly short of expectations. In 2010, the company achieved a total operating income of 8.591 billion yuan, net profit of 790 million yuan, a year-on-year decrease of 6.1% and 33.6%, respectively, and earnings per share of 0.13 yuan, slightly lower than our expectations. The main reason for this was that the company's overall gross margin level fell more than expected, down 4.75 percentage points from the previous year. Among them, the decline in the gross margin of metallurgical equipment was the most obvious, down 13.29 percentage points year on year, far from the 6.21 percentage point decline we had previously anticipated. The 2011 quarterly report was not ideal, but steady growth is still expected throughout the year. In 2011/13, the company achieved a total operating income of 1,326 million yuan and net profit of 22 million yuan, a year-on-year decrease of 8.4% and 76.6%, respectively, and earnings per share of 0.0033 yuan, which was lower than our expectations. The main reason for this was that the overall gross margin level declined by 10.96 percentage points, and there was no positive increase in operating income. Considering that the company is currently full of handheld orders (a total of 16.448 billion yuan of new orders were received in 2010, an increase of 73.58% over the previous year), we expect the company's operating income and net profit to still increase by more than 20% this year. It is expected that nuclear power equipment/heavy pressure vessels will grow steadily, and metallurgical equipment will bottom out and rebound. We judge that the country's long-term nuclear power development plan will not be drastically adjusted. Based on the new orders and revenue achieved in the past two years, it is estimated that the company's orders for handheld nuclear energy equipment currently exceed 4 billion yuan, and the business is expected to achieve steady growth this year; the company has a clear competitive advantage in the heavy pressure vessel field in China, and it is expected that the business will maintain an average annual growth rate of more than 15% over the next three years; with the recovery of the downstream steel industry, we expect the company's demand for metallurgical equipment to gradually break out of the slump, and profitability is also expected to gradually recover. In 2010, the company signed a new order of 9.760 billion yuan for metallurgical equipment, an increase of nearly 9.76 billion yuan over the previous year 500% Risk factors: The prosperity of the downstream industry continues to decline, the cost of raw materials has risen more than expected, and the development of the nuclear energy equipment business has fallen short of expectations. Maintaining the “increase in holdings” rating: According to the performance of the quarterly report, we lowered the company's 2011/2012 EPS forecast to 0.16/0.21 yuan, and the corresponding PE was 32.3/24.6 times, respectively. Considering the company's leading position in the heavy machinery industry, steady growth in future nuclear power equipment/heavy pressure vessels, and recovery growth expectations for metallurgical equipment, we maintain China's “increased holdings” rating.