Summary of 2010 results: operating income was 52900 yuan, up 6.54% over the same period last year; operating profit was 60.31 million yuan, up 197.8% over the same period last year; net profit belonging to the parent company was 39.8 million yuan, up 102.15% from the same period last year; and earnings per share was 0.06 yuan. No distribution, no increase this year.

The increase in comprehensive gross profit margin and the substantial increase in coal sales revenue led to a doubling of performance. The company is mainly engaged in real estate development and coal mining, of which the real estate development is mainly distributed in Dongguan, Guangdong Province. At present, the project rights and interests reserve is about 765000 square meters. The coal mining company is currently mining the Waltaoping Coal Mine with reserves of about 6.858 million tons. At present, the annual production scale is 150000 tons, and the capacity is expected to expand to 300000 tons in the future. The doubling of the company's performance in 2010 is mainly due to the increase in gross profit margin and the substantial increase in coal sales revenue: in 2010, the company mainly sold villa projects in the second phase of the first city in the south of the Yangtze River, with a high average price. as a result, the gross profit margin of the real estate development business increased by 6 percentage points to 37% compared with the same period last year. In 2010, the company achieved coal revenue of 70.55 million yuan, an increase of 191.29% over the same period last year, and gross profit margin rose 11 percentage points to 62% year-on-year, both driving the comprehensive gross profit margin up 10 percentage points to 43%.

The real estate business has maintained stable and rolling development. The projects sold by the company in 2011 are mainly the third phase of the first city in the south of the Yangtze River and Feili Mountain, the water lian project in cooperation with Vanke (the company holds a 50% interest). The construction of the Laobu project Yuting Mountain started in the second half of 2011, and the company has less real estate project reserves. it is expected that small-scale and stable rolling development will be maintained in the future.

Actively expand coal business. In September 2010, the company acquired a 70% stake in Weining Meitangou Coal Mine, which has a legal mining right with a production scale of 150000 tons per year, expanding the company's retained reserves of coal resources to 14.57 million tons. The company said that it will strive to achieve trial operation by the end of 2011. In addition, the company is carrying on the application work of expanding the capacity of Hutaoping Coal Mine to 300000 tons / year, and the total production capacity of the company's coal business is expected to expand to 450000 tons / year in the future.

There is great pressure on short-term funds. As of the end of 2010, the company's paper cash was 101 million yuan, down 44.83% from the beginning of the year, only 30% of short-term liabilities and non-current liabilities due within one year, and the net operating cash flow was-47 million yuan, compared with 220 million yuan in the same period last year. Mainly due to the payment of land value-added tax settlement tax, the company expects project expenditure of about 245 million yuan in 2011, mainly for real estate project development and coal mine construction. In the short term, the company is under great financial pressure. The amount received in advance was 86.51 million yuan, down 44.93% from the beginning of the year, and the guarantee of performance in 2011 was not high. The real asset-liability ratio is 40.37%, which is basically the same as at the beginning of the year, and the financial leverage is not high in the long run.

Profit forecast and investment rating. We expect the company's EPS in 2011-2012 to be 0.099,0.10 yuan. At yesterday's closing price of 4.97yuan, the dynamic price-to-earnings ratio is 55 times and 50 times, the valuation level is abnormally high, and the company's real estate business growth space is relatively small. The main focus in the future lies in the coal mine capacity expansion and the prosperity of the coal industry, maintaining a "neutral" rating.