Incident: Ankai Bus (000868) released an interim report on August 25. During the reporting period, the company's total operating income was 1,573 billion yuan, up 5.96% year on year; net profit attributable to shareholders of listed companies was 31 million yuan, up 14.78% year on year; basic earnings per share of 0.10 yuan. Comment: The net profit growth rate was higher than the revenue growth rate in the first half of the year. In the first half of the year, the company achieved a 1.07% year-on-year increase in operating income and a decrease of 0.72 percentage points in gross margin; the automobile chassis realized a 15.80% year-on-year decrease in revenue; the parts and repair business increased 1.97 times, and gross margin increased by 7.01 percentage points; other businesses were similar to the parts business, and both revenue and gross profit increased. In addition, the performance of Anhui Ankai Futian Shuguang Axle Co., Ltd., a joint venture of the company, increased dramatically, resulting in a 30.90% increase in investment income over the previous year. Therefore, the growth rate of net profit in the current period was higher than the growth rate of revenue, mainly due to the increase in parts and car repair business other than buses and investment income; the international market achieved a breakthrough in the current period, and the company's exports achieved operating income of 316 million yuan, an increase of 3.06 times over the same period last year, ranking first in domestic bus exports. Export revenue as a share of total operating income jumped from 5.24% last year to 20.10%, an increase of 14.86 percentage points. However, due to rising raw material prices and dealing with international market competition, the gross margin of the company's exports in this period was 12.38%, and the margin for gross profit was reduced by about a quarter compared to last year. In the first half of the year, the company had sufficient export orders and signed orders for 3,000 units from Saudi Arabia. The first batch of products was successfully delivered on August 15, the Russian order for 280 cars, and the Malaysian government's tender project for 70 bus chassis; the multi-pronged approach to the construction of new energy buses led the company's R&D capacity in the field of new energy buses. In the first half of the year, the company achieved mass production of vehicle controllers and completed software development for online vehicle diagnostic systems. The vehicle control strategy passed testing and verification, ensured the reliability of the self-developed electronic control system, and has already put it into mass production on new energy buses; and improved the sales mechanism for new energy buses. The company has set up a new energy bus sales company, expanded the sales force, organized special training, strengthened the construction of a new energy after-sales service system, and raised capital to guarantee the construction of new energy vehicle expansion and powertrain manufacturing projects. The company plans to issue a targeted additional 45 million shares and raise no more than 518 million yuan. It has now received an approval letter from the Securities Regulatory Commission, and it is expected that the additional issuance plan will be completed in the second half of the year. Investment rating: The company has focused on developing new energy technology in recent years. The new energy bus market will expand steadily in the next few years and will bring great benefits to the company. In addition to the company's breakthrough progress in the international market, the company's earnings per share for the next three years are expected to be 0.27, 0.32, and 0.41 yuan. Using 2011/6/30 as the benchmark date, the corresponding PE for 2011-2013 is 39, 33, and 26 times, respectively. Maintain the “Overweight” rating.