From January to September 2010, the company achieved operating income of 197 million yuan, a year-on-year decrease of 21.58%; operating profit of 1.09 million yuan, a decrease of 740,000 yuan from January-June; realized net profit attributable to owners of the parent company of 1.08 million yuan, a year-on-year decrease of nearly 20.2%, and basic EPS of 0.005 yuan; in the third quarter of 2010, the company achieved operating income of 73 million yuan, a year-on-year decrease of 22.29%, and operating profit of 2.51 million yuan. Reversing losses over the previous year, net profit attributable to owners of the parent company was 13.35 million yuan, achieving net profit of 13.35 million yuan The basic EPS is 0.07 yuan. The overall gross margin increased significantly. From January to September 2010, the company's comprehensive gross profit margin was 19.91%, up 1.41 percentage points year on year. Among them, the comprehensive gross margin for the third quarter reached 26.79 percent, up 8.02 percentage points year on year, and 7.83 percentage points over the second quarter. The reason for the sharp increase in gross margin in the third quarter was mainly because continuous rainfall in February-June curbed timber harvesting, and the share of timber business revenue in the third quarter increased. The gross margin was as high as 41.5%, enabling the product structure in the third quarter to improve in the short term, driving a sharp increase in gross margin. The fee rate increased further during the period. From January to September 2010, the company's period expense rate reached 25.62%, an increase of 3.31 percentage points over the previous year, mainly due to a sharp increase of 5.91 percentage points to 14.83% in the management fee rate; in a single quarter, the company's period expense rate for the third quarter of 2010 was 23.62%, an increase of 2.42 percentage points over the previous year. The main reason is still the sharp increase in the management expenses rate. The increase in profit was due to non-operating income. The company achieved net profit attributable to owners of the parent company of 13.35 million yuan in the third quarter of 2010, while operating profit for the same period was only 2.51 million yuan. The sharp increase in net profit was mainly due to the sharp increase in non-operating income. The company sold financial assets available for sale in the third quarter, and realized non-operating income of 1.56 million yuan, an increase of 5.38 times over 2.36 million yuan in January-June. Future highlights. The company has a medium density fiberboard renovation and expansion project with an annual output of 210,000 cubic meters and a supporting 160,000 mu fast-growing eucalyptus raw material forest base project that is still under construction. However, we value 600,000 mu of collective forest land owned by the company even more. As the reform of the national forestry system progresses, once restrictions on harvesting targets are relaxed, the company's timber business will experience explosive growth. Profit forecasts and investment ratings. Since the gross margin of the company's main business is low, the period expense ratio is too high, and it is difficult to fix the short-term loss situation, 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.