The agreement to transfer 29% of the shares was finally approved. The company announced today that it has received “Approval from the Ministry of Commerce on the introduction of overseas strategic investors by Zhuhai Zhongfu Industrial Co., Ltd. in principle”. The shareholder of the listed company, Zhuhai Zhongfu Industrial Group, transferred 29% of the company's shares to Asia Bottle (HK) Company Limited (Asia Bottle) with a total price of 1.65 billion yuan. After half a year of waiting, the event will finally come to an end. After the transfer was completed, Asia Bottle Industry became the actual controller of the company, while the shareholding share of Zhuhai Zhongfu Industrial Group fell to 5.87%. CVC is expected to improve the management level of the company after entering the company. CVC Asia Pacific Fund II is the actual controller of the Asian bottle industry, with a cumulative management capital of over US$1.9 billion. It is currently one of the largest private equity funds in the Asia-Pacific region and has rich experience in acquiring and nurturing enterprises. Given that the Asian bottle industry promises not to transfer its shares for 3 years after the transfer of the agreement is completed, we expect CVC Holdings to use its advanced management experience to improve the management level of listed companies and enhance the value of the company. We believe that there is still potential for Zhuhai Zhongfu to improve performance through strengthened management, such as Zijiang enterprises whose cost ratio during the period was significantly higher than that of Zijiang enterprises in the same industry (2006, 15.58% vs. 13.75%). CVC can help companies develop their business. CVC is expected to rely on its international background to help Zhongfu develop business: on the one hand, it can expand the company's financing channels and seek overseas capital to support the company's further development; on the other hand, it can help listed companies expand new products and markets, such as using its huge international network to try to expand Zhongfu's PET beer bottle business. The company is breaking out of the trough with the PET bottle packaging industry, but tax incentives that have expired one after another have inhibited performance growth. The recovery of the PET bottle packaging industry has confirmed our earlier judgment — the performance of the industry leader, Zhuhai Zhongfu, has improved markedly, and its gross margin level has increased to 24.55% from 21.83% in 2005. However, the “two exemptions and three halves” of income tax benefits for subsidiaries expire one after another, which will lead to a sharp increase in the comprehensive tax rate, which will have an inhibitory effect on the company's performance growth (reported income tax expenses increased by 119.5% year-on-year). Maintaining “neutrality”, the current valuation is too high, so we need to pay attention to the integration effect of CVC after entering the market. At the beginning of this year, since the company will benefit from the warming PET industry, our performance rebounded and the company's rating was raised. The company's stock price increased by more than 65% during that time. Corresponding to our profit forecast (07-09 EPS was 0.21, 0.29, and 0.37 yuan respectively), although we can expect an increase in the value of the company after CVC's entry, the company's valuation is already too high, so we downgraded the company's rating in the middle of the year. We still maintain a “neutral” rating and will continue to track the improvement measures taken to the company after foreign investment and its effect on improving its performance.