The company achieved operating income of 4,572 million yuan in 2009, an increase of 58.15% over the previous year; operating profit of 651 million yuan, an increase of 78.88% over the previous year; net profit attributable to the parent company was 297 million yuan, an increase of 117.70% over the previous year; and achieved earnings of 0.20 yuan per share. The distribution plan is a payout of $0.80 (tax included) for every 10 shares. In the first quarter of 2010, the company achieved operating income of 1,416 million yuan, a sharp increase of 21342% over the previous year, operating profit of 67.9534 million yuan, an increase of 161.69% over the previous year, and achieved net profit attributable to the parent company of 300.09 million yuan, an increase of 24.32% over the previous year, achieving basic earnings of 0.02 yuan per share.

Overview of the company's fundamentals: The company uses “regional development+financial equity investment” as its main business strategy. In addition to this, its main business also involves waste-to-energy business, greening industry, high-tech clean materials industry, and oil storage and sales industry. The company invested in shares of financial institutions such as Bohai Securities, North International Trust, Bank of Tianjin, and Guotai Junan Securities. The financial industry controlled by Teda Holdings, the actual controller of the company, involves banks, insurance, trusts, securities, funds, guarantees, pawnbrokers, etc., and has formed a relatively complete financial holding platform.

Revenue from the real estate business grew steadily. The company's real estate business revenue in 2009 was 412 million yuan, an increase of 3.41% over the previous year. The settlement projects were mainly the Torrega Garden project and affordable housing in the Hangu Binhai Community. The gross margin was 43.26%, down from 2008. The Torrega project sold 95,800 square meters throughout 2009, an increase of more than 70,000 square meters over 2008. Some of this will be settled in 2010. It is expected that the Torrega project will continue to bring the company a steady profit return for 3-4 years in the future. Affordable housing sales in the Hangu Binhai Community were good, but due to low gross margin, they did not contribute much to profits, and at the same time lowered the gross profit of the real estate business.

The environmental protection industry is developing rapidly, and subsidiaries are expected to be spun off and listed: in 2009, the company achieved revenue of 579 million yuan from the public facilities management business, an increase of 51.17% over the previous year, and revenue from the environmental management business was 140 million yuan, an increase of 16.89% over the previous year. The company has obtained 1 new waste-to-energy project, 1 landfill project, and 1 straw power generation project. Currently, it has 9 environmental protection and new energy projects, including 4 large-scale waste incineration power generation projects, 4 comprehensive garbage treatment projects, and 1 straw power generation project.

The Securities Regulatory Commission has agreed that subsidiaries of listed companies can be spun off and listed if specific conditions are met. Teda Clean Materials Co., Ltd., a holding subsidiary of the company, all met the conditions for a spin-off listing. The business developed rapidly, achieving net profit of 46.1071 million yuan in 2009, an increase of 7.86 times over the previous year. In 2010, the subsidiary plans to invest 95 million yuan to add two new production lines and build a plant in the West Branch. After this investment is completed, Teda Clean's annual production capacity will increase from the current 4,500 tons to 7,500 tons, and the average annual net profit during the project's operation period is expected to be 31.35 million yuan. If Teda Clean Materials Company is listed, its market capitalization is expected to reach 38-4.5 billion yuan, and the company can receive a one-time investment income of 3-3.5 billion yuan, about 2.0-2.4 yuan/share.

The rapid increase in revenue from the trade business was the main reason for the increase in the company's business revenue in the first quarter of 2010: in the first quarter of 2010, with the growth of imports and exports, the company's trade business also grew. The revenue in the first quarter increased by more than 200% year-on-year, mainly due to the rapid growth of trade business. However, due to a 53.4% drop in investment income and an increase in minority shareholders' share of profit and loss (mainly due to local business revenue coming from Nanjing Xincheng Development Co., Ltd., which holds 51%), the growth rate of net profit attributable to the parent company was far lower than the growth rate of operating income.

Profit forecast and rating: We predict that the company's net profit attributable to the parent company in 2010-2012 will be 187 million yuan, 222 million yuan and 247 million yuan respectively. The corresponding EPS will be 0.13 yuan, 0.15 yuan and 0.17 yuan respectively. Based on the April 23 closing price of 10.35 yuan, dynamic PE will be 82 times, 69 times and 62 times respectively. The company's valuation is too high, maintaining the company's “neutral” rating (see Table 1). If Teda Clean Materials, a subsidiary of the company, can qualify for a spin-off listing, it will give the company an opportunity to obtain a large one-time profit. At the same time, successful financing for the subsidiary is also expected to expand the scale of the business, increase the growth rate of performance, and benefit the company. Therefore, investors are advised to pay attention to relevant investment opportunities.