In 2009, the company achieved operating income of 2,329 billion yuan, a year-on-year increase of 13.3%; operating profit of 53.48 million yuan, a year-on-year decrease of 39.7%; net profit attributable to the parent company of 49.92 million yuan, a year-on-year decrease of 17.53%; and a basic earnings per share of 0.07 yuan. This year, the company does not plan to distribute profits or transfer capital from capital reserves to increase share capital. The decline in gross margin and high asset impairment losses are the main reasons for the decline in the company's performance. The company's gross margin during the reporting period was 23.03%, down 2.61 percentage points from the previous year; asset impairment losses were 19.71 million yuan (including losses from bad debts of 158.97 million yuan), an increase of 28.31 million yuan over the previous year. The decline in gross margin and large asset impairment losses are the main reasons for the year-on-year increase in the company's operating income and the decline in operating profit. Overview of fundamentals. The company's business includes real estate development, construction, biomedicine, etc. In 2009, real estate development, construction, and biomedicine achieved revenue of 1.8 billion yuan and 315 million yuan respectively, accounting for 82.72% and 14.46% of operating income; achieving gross profit of 178 million yuan and 261 million yuan, respectively, accounting for 39.46% and 57.9% of the company's gross profit. Implement a management policy with real estate and pharmaceuticals as the main business. In terms of real estate, the company has explored the implementation model of “science and technology real estate” and has successively established Chengdu Zhongguancun Technology Development Co., Ltd. and Zhongguancun Technology (Dalian) Co., Ltd., which achieved stock housing sales in 2009 with a construction area of over 15,000 square meters and sales revenue of over 300 million yuan; the Harbin Songzhongguancun project, which has been dormant for many years, has fully resumed work, and is expected to be sold in 2010. The company's pharmaceutical business is mainly carried out through Beijing Huasu Pharmaceutical Co., Ltd., and its main product, Huasu tablets, achieved sales of 166 million yuan during the reporting period, an increase of 36.88% over the previous year, ranking among the top five in the field of oral throat products. In addition, Beijing Zhongguancun Youth Venture Capital Co., Ltd., which holds 88.75% of the company's shares, is mainly engaged in venture capital business such as project investment, and its rich project resources are expected to benefit from the spin-off and listing. Financial analysis. The company's balance ratio at the end of the reporting period was 77.45%, down 2.66 percentage points from the previous year, but still relatively high; the period expense ratio was 17.26 percent, down 0.78 percentage points from the previous year. Earnings forecasts and investment ratings. We expect the company to achieve earnings of 0.12 yuan, 0.18 yuan, and 0.25 yuan respectively in 2010-2012. Based on the closing price of 6.91 yuan on April 16, the corresponding dynamic price-earnings ratios are 59 times, 39 times, and 28 times, respectively, giving a “neutral” investment rating. Risk warning. The company currently has a relatively high level of debt and is involved in a number of lawsuits and arbitrations.