From January to December 2009, the company achieved operating income of 1.239 billion yuan, an increase of 65.74% over the same period last year; operating profit of 52.69 million yuan, an increase of 8.41% over the same period last year; net profit of shareholders belonging to listed companies was 46.61 million yuan, an increase of 21% over the same period last year; and diluted earnings per share was 0.15 yuan. From October to December, the company achieved operating income of 403 million yuan, an increase of 62.65% over the same period last year; net profit belonging to shareholders of listed companies was 12.48 million yuan, an increase of 193.51% over the same period last year; and diluted earnings per share was 0.04 yuan.

The policy is good, and the three major businesses are growing rapidly. Thanks to the national economic stimulus policy and the construction of "Hercynian" in 2009, the company's three main business water services (including tap water production, sewage treatment, water engineering, etc.), car sales and import and export trade increased by 10%, 54% and 818% respectively. Among them, 1) the operating income of the water business reached 94.15 million yuan, an increase of 10% over the same period last year, with a gross profit margin of 43.77%, an increase of 3.36% over the same period last year, mainly due to the increase in the recovery rate of water charges and the proportion of sewage treatment business with higher gross profit margin. 2) Automobile sales achieved operating income of 960 million yuan, an increase of 54% over the same period last year, with a gross profit margin of 8.39%, an increase of 2.86% over the same period last year, mainly due to the high growth of the income industry and the expansion of the company's 4S store; 3) the operating income of import and export trade reached 157 million yuan, an increase of 818% and a gross profit margin of 1.72%, a decrease of 6.97%.

During this period, the expense rate decreased significantly. In 2009, the company management expense rate was 3.16%, down 1.77% from the same period last year, and the financial expense rate was 2.1%, down 4.77% from the same period last year. We believe that the main reasons are the consolidation of financial statements (new Zhangzhou Xinbao Real Estate Development Co., Ltd. And Sanming Jiujiu Toyota Motor Corp sales and Service Co., Ltd.), improved cost control and reduced financial expenses for the company's repayment of loans.

Business analysis in 2010. 1) the growth of water business is stable, the gross profit margin is guaranteed, but the proportion of income is relatively small. Under the background of building an energy-saving society, there is still room for an increase in water price, but the proportion of this business income is very low, which is less than 8% in 2009. The contribution to the company's performance is limited; 2) the automobile sales business is facing a certain price war pressure this year, and the gross profit margin has declined accordingly. 3) the new real estate business is affected by the tightening of national policies (National Article 11, etc.), so it is not optimistic.

Profit forecast. From 2010 to 2012, the company's EPS is expected to be 0.17,0.22,0.32 yuan respectively, with a closing price of 8.60 yuan on April 27th, and a corresponding dynamic PE of 52 times, 39 times and 27 times respectively, maintaining the company's "neutral" rating.

Risk hint. 1) car sales are declining, and fierce competition leads to a series of risks brought about by the price war. 2) the real estate business is negatively affected by the policy.