Wind power gearbox business: the company is one of the earliest domestic enterprises to design and manufacture wind power gearbox, and the drafting unit of the national standard of "wind turbine gearbox", but due to some historical problems (joint venture with ZF), this business has stagnated for several years, and now lags far behind Nangao teeth and other enterprises. Nangao teeth listed in 2007, with the help of the capital market, a good grasp of the golden period of the rapid growth of the wind power industry, wind power transmission equipment income has doubled for many years from more than 300 million in 2006, and the related income is expected to exceed 6 billion yuan in 2010. Hangzhou teeth regained its advantages in the 2MW wind power gearbox technology, which was completed in only 4 months from the introduction of the technology to the first gearbox off the line, almost at the same time as the tower of the south high gear 2MW box. A sales contract of 392 million yuan was signed with a wind power company in November last year, all of which was implemented in 2011. The company's fund-raising project is expected to complete the plant construction in June and July 2011, and after the production scale is increased, the gross profit margin is expected to improve. The company's wind power gearbox products cover 250KW, 600KW, 850KW, 1.5MW, 2MW products, 3MW is also under development. Wind power is the fastest growing sector of the company's business in the future. On the one hand, it comes from the follow-up and steady growth of the wind power industry, on the other hand, it comes from the improvement of the company's market share. It is expected that at the end of the 12th five-year Plan, the income scale will exceed that of marine business and construction machinery business. As the leader of the gearbox, Hangzhou teeth will re-establish the status of the wind power industry with the help of the capital market in the future.

Marine gearbox: the company's marine gearbox covers a wide range of products, with power from 10kw-10000kw to a maximum tonnage of 50, 000 tons (ships with larger tonnage generally use low-speed diesel engines, not gearboxes). The company maintains an absolute leading position in the domestic marine gearbox market, with a market share of 65% in 2009. In the future, it will focus on the integrated sales of gearbox and propeller, in which the propeller is a variable propeller, which can be adjusted according to navigation conditions, which can make full use of power and reduce the fuel consumption of ships, and the price can reach about 5 times that of fixed propellers. The company cooperates with the military, including the "Hangzhou Tooth Office of the military Representative Office of the Chinese people's Liberation Army in Dongfeng Company" and the "military Representative Office of the Chinese people's Liberation Army Navy in Hangzhou". The navy can mainly supply gearboxes for speedboats, warships and anti-smuggling boats. military prices are very generous and orders are stable. In the future, the construction of China's naval strength is expected to bring rich orders to the company.

Gearbox for construction machinery: at present, domestic construction machinery mainframe manufacturers will have their own supporting gearbox factories, but on the one hand, their production capacity is limited, on the other hand, they are not as professional as Hangzhou teeth and other manufacturers, so they still need to be purchased. The future mainstream of construction machinery gearbox is electro-hydraulic box, at present, foreign countries are basically electro-hydraulic box, the trend of replacing the traditional gearbox can be seen. In China, only Hangzhou teeth and Liugong introduced technology from ZF in the 1990s. The company has digested and absorbed the technology, and now its products are widely used in the field of construction machinery. The company's construction machinery gearbox is mainly equipped with forklifts, loaders, bulldozers, etc., the growth rate of the downstream industry is expected to be relatively stable, with the company's investment projects reaching production, it is expected that this business will exceed the average growth rate of the industry.

Profit forecast and investment suggestions: generally speaking, the company has advantages in design and manufacturing of transmission equipment. The accumulation of technology and process data over the past few decades is a great wealth and a good target for investment in the equipment manufacturing industry. We expect the company to achieve operating income of 3.02 billion yuan, 4.03 billion yuan and 5.45 billion yuan in 2011, 2012 and 2012, with net profit of 175 million yuan, 242 million yuan and 307 million yuan respectively, and earnings per share of 0.44 yuan, 0.60 yuan and 0.77 yuan, respectively. at present, the price-to-earnings ratio of the stock price is 37 times, 27 times and 21 times respectively.

Risk hints: the uncertainty of UHV communication construction schedule and the price uncertainty of UHV products.