In the third quarter of 2011, the company achieved operating income of 272 million yuan, a year-on-year increase of 37.74%; operating profit loss of 10.6928 million yuan, a decrease of 395,900 yuan compared with the same period last year; net profit loss attributable to owners of the parent company of 12.17 million yuan (1,0883,300 yuan in the same period last year); and basic earnings per share - 0.06 yuan/share. The new production line was put into operation, and revenue increased significantly. The company's main business is the production and sale of medium fiber board and timber. There are currently 3 production lines of medium fiber board, two of which have an annual output of 30,000 cubic meters and 80,000 cubic meters respectively. The equipment for these two production lines was introduced in 1997 and 2003, respectively, and their competitiveness is weak. The third production line, with an annual output of 210,000 cubic meters, was officially put into operation in October 2010. The company's revenue increased by 37.74% year-on-year during the reporting period. The timber business was subject to policy restrictions and failed to contribute significantly to performance. The company currently has 1.81 million mu of woodland, including 1.61 million mu of commercial forest and 200,000 mu of natural forest. The profitability of the timber business is strong, and the gross margin is as high as 55%. However, due to restrictions on logging, the timber business failed to contribute significantly to performance during the reporting period. The scale effect was reflected, and the cost rate for the period decreased year over year. During the reporting period, the company's annual expense ratio decreased by 2.4 percentage points to 23.2% year on year, mainly due to the sharp increase in revenue and the gradual effects of scale. Future highlights. The company's medium density fiberboard renovation and expansion project with an annual output of 210,000 cubic meters was put into operation in October 2010, and the project supporting 160,000 mu of fast-growing eucalyptus raw material forest is still under construction. At present, the new production line has initially shown an increase in the company's profitability. It is expected that the company's profitability will improve in 11 years, but given the judgment of the industry's serious overcapacity, we do not expect much from the company's performance for the time being. In comparison, we value the 1.81 million mu of woodland owned by the company more. Once the country relaxes restrictions on harvesting targets, the timber business will experience explosive growth. Profit forecasts and investment ratings. The serious overcapacity situation in the medium fiber board business is difficult to rectify for a while. The gross margin of the main business is low, and the competitiveness of the new production line has improved, but with the issuance of the “Emergency Notice from the Fujian Forestry Department on the Suspension of Natural Forest Harvesting”, the supply of branches and lumber in the province will drop drastically in the next few years, and the supply and price of raw materials will also suppress the company's performance. We will not predict the company's profit for the time being, and maintain a “neutral” investment rating. Risk warning. 1. There is a risk that the adjustment of the furniture and building materials industry will lead to a decline in demand for the company's products. 2. Risk of large fluctuations in raw material prices.