The company recently announced that Shanghai Baifu Holdings Co., Ltd. (“Baifu Holdings” for short) reduced its shareholding by 3.638% through the bulk trading system, and Baifu Holdings dropped from 7.973% before the reduction to 4.335%. We believe that financial investor Baifu Holdings is reducing its holdings normally and is still optimistic about the company's future development. Considering lowering the company's profit forecast, we lowered the company's target price to 15.00 yuan to maintain the buying rating. The main point supporting the rating is the Radio, Television and Electric Industrial Park, the largest domestic medium- and low-voltage electrical industrial park positioned in the middle and high-end markets, is expected to be fully put into operation within the year, and the scale and synergy effects are obvious. The Radio, Television and Electric Industrial Park covers an area of nearly 400 acres, and five specialized plants have been built. After all are put into operation, the output value will reach more than 6 billion yuan. Yan Huaizhong, founder of the company, began building industrial parks, business units and brand channels in 2007, forming the current industrial park pattern and product and brand strategy. In the next three or four years, the company will continue to advance along the established product and brand strategy, relying on the Radio, Television and Electric Industrial Park. Power electronics and components have a foundation for rapid development, and profitability continues to improve. After years of R&D, certification, and channel construction, power electronics products have received approval and orders from high-end customers, and high-capacity inverters and active filters have a foundation for rapid development; component business channel construction is already in place. After completing GE's factory and experimental certification of the remaining two AEG low voltage circuit breakers within the year, the components will enter a stage of rapid profit growth. With more than 1 billion dollars in cash in hand, an excellent corporate culture helps the company carry out capital operations to expand the product chain on a global scale. The company will have plenty of cash in the next few years. With an excellent corporate culture, we anticipate that the company may carry out capital operations to expand the product chain on a global scale. We anticipate that the company and AE of the United States will most likely develop capital cooperation on photovoltaic inverters and their integrated electrical systems, as well as possible mergers and acquisitions in the field of component technology. The main risk faced by ratings The credit crunch led to a slowdown in government and corporate investment, which in turn caused company orders to fall short of expectations. The valuation estimates earnings per share for 2011-2013 of 0.44, 0.60 and 0.81 yuan, giving a price-earnings ratio of 25 times 2012. The target price was lowered from 18.75 yuan to 15.00 yuan, maintaining the purchase rating.