Report summary: The interim results rose sharply and successfully turned a loss into a profit. In the first half of 2012, the company achieved operating income of 1,304 billion yuan, an increase of 4.91% over the previous year; and realized net profit attributable to owners of the parent company of 74 million yuan, an increase of 167.81% over the previous year. Achieved earnings of 0.12 yuan per share. The gross margin rose sharply, and the expense ratio increased slightly during the period. The company's consolidated gross margin was 14.01%, up 11.77 percentage points from the same period last year. The gross margins for the first quarter and second quarter were 12.55% and 16.07%, respectively, up 28% from the previous month. Net sales interest rate rose 14.6 percentage points from -8.84% in the same period last year to 5.71%. Net interest rates for the first quarter and second quarter were 1.46% and 11.69%, respectively, up 944.23% from the previous quarter. In the first half of the year, total expenses for the period were 19.6 million yuan, an increase of 16.47% over the previous year, accounting for 15.07% of operating income. Benefit from higher electricity prices and investment returns. Last year, the company's thermal power plant, Fengcheng Phase II Power Plant, raised feed-in tariffs twice: ① On 2011/6/1, the feed-in price was adjusted from 0.422 yuan/kWh to 0.4482 yuan/kWh ② On 2011/12/1, the feed-in tariff was adjusted from 0.4482 yuan/kilowatt-hour to 0.4852 yuan/kilowatt-hour. In the first half of the year, the company exchanged non-monetary assets with Taihao Technology Co., Ltd. using 20% of its shares in Taihao Software Co., Ltd. and Taihao Technology Co., Ltd. This exchange contributed 62.81 million yuan in investment income to the company, accounting for 84.25% of net profit, which is approximately 0.09 yuan in EPS. Earnings forecasts and investment ratings. In 2012-2014, the company is expected to achieve net profit of 139, 2.74, and 351 million yuan, earnings per share of 0.22, 0.42, and 0.54 yuan, corresponding price-earnings ratios of 18, 9, and 7 times; the 2013 valuation level is lower than the industry average. The company's long-term focus is on Fengdian Phase III and Pengze nuclear power projects, and plans to bring in strategic investors. Considering future growth, the company was given a purchase rating, and the target price for 6 months was 5 yuan.