From January to June 2010, the company achieved an operating income of 370 million yuan, an increase of 9.3% over the same period last year, an operating profit of-34.92 million yuan, a decrease of 560.8% over the same period last year, and a net profit of 4.05 million yuan belonging to the owner of the parent company, down 75.6% from the same period last year. Basic earnings per share is 0.005 yuan.

Low pig prices are a drag on the company's performance. The company is mainly engaged in pig breeding and is the largest leading pig breeding enterprise in Haikou City. During the reporting period, pig prices dropped from 12.2 yuan / kg in January to 9.95 yuan / kg in May, a decrease of 12.3%. At the same time, corn prices rose from 1.5 yuan / kg in January to 2.04 yuan / kg in May, an increase of 36%. Pig prices fell and corn rose, resulting in pig grain prices lower than 6:1 in the past four months, and the pig farming industry suffered serious losses. Luo Niushan is no exception. Due to the downturn in pig prices and the rise in corn prices, the company's pig business revenue and gross profit both declined. During the reporting period, the income of the pig business was 170 million yuan, down 20.7% from the same period last year, and the gross profit was-18.52 million yuan, down 198.6% from the same period last year. The downturn in pig prices seriously affected the company's performance.

Strong release of the real estate business led to revenue growth. The company invested in Jindi in 2009. The first phase of the "Hancheng" project entered the sales period during the reporting period, and the real estate business was strongly released. during the reporting period, the company's real estate business income was 43.72 million yuan, a year-on-year increase of 27.82 million yuan, an increase of 175.0%; during the reporting period, the company's revenue was 370 million yuan, an increase of 31 million yuan over the same period last year, while the real estate business revenue increment accounted for 89.7% of the revenue increment. The strong release of the real estate business led to revenue growth.

Feed and veterinary drug sales benefit from frequent occurrence of pig diseases. During the reporting period, pig diseases occurred frequently under the influence of low temperature, drought, flood and other bad weather, and the company's feed and veterinary drug business benefited from this. In the first half of the year, the business income reached 74.67 million yuan, an increase of 104.4% over the same period last year, and the gross profit margin reached 11.6%. The substantial increase in business revenue also plays a certain role in promoting revenue growth.

The cost of selling pipes has increased significantly. During the reporting period, the company's sales expenses reached 60.08 million yuan, an increase of 27.7% over the same period last year, much higher than its revenue growth rate of 9.3%. While the company's revenue increased, the sales fee increased significantly, indicating that the company's management efficiency still needs to be improved.

Profit forecast and investment rating: considering that the possibility of a slump in pig prices in the first half of the year is small, the company's EPS in 2010-2012 is expected to be 0.05,0.04,0.05yuan respectively. Based on the closing price of 7.6yuan on August 26th, 2010, the corresponding dynamic PE is 152,190,152 times, maintaining a "neutral" rating.