Company resources are skewed towards biotechnology and health industries. At present, the company has formed four major industrial patterns: Chinese and Western proprietary pharmaceuticals, biopharmaceuticals, animal protection, and modern steel structures. Among them, the company's future positioning lies in the biotechnology and health industry. Judging from growth, Huashen Biotech, which has several types of new drugs, is undoubtedly the focus of the company's future development, while the promotion of lycatine is a top priority. Ricatin is about to break through the bottleneck, and the prospects for the biological industry are bright. Small doses of radiation help ricatin break through promotion bottlenecks. The interim report shows that the growth rate of lycatine sales has declined sharply to only 10.43%. The reason for this is mainly because the current policy's stringent requirements on the use environment and equipment for high-dose radionuclide therapy hinder the widespread promotion of ricatin. To this end, the company has launched a targeted small-dose dose of lycatine, which will soon enter a substantial promotion period in the second half of the year. Judging from now on, it is less restricted in trials and can be promoted in general hospitals, and it has been initially proved that it has obvious curative effects in preventing recurrence and metastasis of liver cancer after surgery, and has great market prospects in the future. The phase IV clinical trial is coming to an end, and market recognition is expected to increase. The phase IV clinical trial of lycatine is nearing completion. The report is expected to be released in the second half of the year. The clinical efficacy revealed at that time will determine the lifelong happiness of lycatine. Judging from the clinical efficacy of ricatin, there was a steady upward trend in efficacy during phase II and phase III clinical trials. This is a positive sign. We believe that with the gradual improvement of medication methods, the effectiveness of phase IV clinical trials is expected to further improve, thus laying the foundation for the subsequent promotion of ricatin. The launch of new products is imminent, and the biotechnology industry is full of momentum. Huashen Biotech's two new products, freeze-dried eye drops, recombinant human epidermal growth factor and oxidative low-density lipoprotein quantification kits will soon be put into production and will start contributing to performance next year. Judging from the ophthalmology market and the coronary heart disease diagnosis market separately, both have good market prospects, and Huashen Biotech is expected to add strength. 37 Tongshu has a large market space, leading the growth of proprietary Chinese medicine business. Compared with mature products, Koyuanshu and Vitalsu, which are growing slowly, 37 Tongshu capsules grew rapidly, with a compound growth rate of 57% from 2007 to 2009. Considering that traditional Chinese medicine has been widely accepted to treat cardiovascular and cerebrovascular diseases and the technical and efficacy advantages of 37 Tongshu capsules, we believe that 37 Tongshu capsules are expected to achieve continued high growth and become the main engine for the development of proprietary Chinese medicine business. The income of the animal insurance business fluctuates greatly, so the live vaccine for pseudorabies in pigs is a highlight. Due to intense competition in the live swine fever vaccine market, one of its main products, the company's animal insurance business revenue is not stable. The future focus is that the pig pseudorabies vaccine is expected to be shortlisted in the national compulsory immunization program, thus achieving further expansion. The market share of the steel structure business has increased significantly, and there will be no divestment in the short term. On July 29, Huashen Steel just signed a construction contract worth 162 million yuan. The construction period ends on December 31 this year. In addition to revenue of 93 million yuan in the first half of the year, Huashen Steel's revenue this year has greatly surpassed last year's annual revenue of 134 million yuan, and its market share in Sichuan and Chongqing has increased markedly. Considering that the steel structure business has a history of many years and has basically remained profitable, the company will not consider divestment in the short term. Fund-raising projects will promote industrial concentration, and operational efficiency will improve. We believe that the company's implementation of targeted additional distribution in the second half of the year is a probable event. Except for the biotechnology improvement and expansion project, which has basically been completed, the rest of the fund-raising projects are expected to be put into operation in 2012, which will resolve the production capacity problem of key pharmaceutical products at that time. Moreover, the production bases of all major new subsidiaries will be concentrated in Huashen Science Park to achieve resource sharing and optimal allocation, which can improve management efficiency to a certain extent. Profit forecasts and investment ratings do not take into account targeted increases. We predict that the company's EPS for 2010-2012 will be 0.07 yuan, 0.27 yuan, and 0.41 yuan, respectively. We believe that with the introduction of small doses of lycatine on the market, lycatine will effectively break through the original promotion bottleneck. Coupled with the launch of new products, explosive growth is expected. Due to equity incentives, management expenses increased by 202.04 million yuan this year. Coupled with equity dilution, EPS was diluted by about 0.1 yuan, resulting in poor performance this year. Judging from the stock price, the company's PE in 2011 and 2012 was 51 times and 33 times, respectively, which basically reflects the valuation premium brought about by high growth, so for the first time, we gave the company an investment rating of “increased holdings”. For long-term investors, we believe that the company's superior R&D strength and products will guarantee the company's long-term high growth and can be held firmly; however, short-term stock prices are too high, so short-term investors are advised to reduce their holdings when the price is high.