The company's performance is in line with expectations. From January to September 2011, the company achieved operating income of 1,145 million yuan, an increase of 8% over the previous year; operating profit of 44.53 million yuan, a decrease of 5% over the previous year; and net profit of the parent company of 63.29 million yuan, a decrease of 10% over the previous year. The basic earnings per share were 0.11 yuan, and the basic earnings per share after deducting non-recurring profit and loss was 0.09 yuan. The performance was in line with expectations. During the reporting period, the company's revenue increased 8% year on year while net profit fell 10% year on year, mainly due to a decrease in government subsidies and payment of project intermediary fees during the reporting period. At the same time, the company's gross margin fell from 24% year over year to 23%. We expect the annual revenue scale to reach 1,318 billion yuan, and the net profit attributable to the parent company to reach 109 million yuan. Maintain a “neutral” rating. The forecast for the company's 2011-2013 EPS is 0.20, 0.21, and 0.24 yuan. Under the current stock price (9.08 yuan), the corresponding PE is 46, 43, and 38 times, respectively. We believe that, on the one hand, the continued decline in student numbers, the recycling of textbooks, and the relocation of the headquarters of Xinhua Bookstore in the North Book City may continue to have an adverse impact on 2011-2012 performance; on the other hand, in the context of in-depth cultural system reform, mergers and acquisitions across media, regions, industrial chains, and ownership systems in the company's publishing industry will receive some policy support, but in the short term, the M&A plan still faces local administrative barriers, so it may be difficult to achieve a substantial effect on performance improvement in the short term. Currently, the company's valuation is still high. If no catalyst exceeding expectations appears in the future, there is limited room for stock price growth, maintaining the company's “neutral” rating.