The first quarter of 2010 was in line with expectations: Jianfeng Chemical released its 2010 1st quarter report. We achieved sales revenue of 497 million yuan, a year-on-year decrease of 4.7%, a month-on-month increase of 52.7%, main business profit of 7.43 million yuan, net profit of 3.59 million yuan, a year-on-year decrease of 96.1% and a month-on-month decrease of 76.7%, or 0.006 yuan per share, which is in line with our expectations. The sharp decline in the company's performance was mainly in the first quarter. The company's “one chemical” urea plant was shut down for 70 days and there was almost no production. Sales were mainly based on fertilizer purchased from agricultural materials purchased from August 1. Meanwhile, urea prices in southwest China were sluggish this year. Front: · The company's “One Chemical” plant resumed production on March 15, and the “Second Chemical” 800,000-ton large urea plant machine was completed, and testing began. Negative: Production was damaged in the first quarter, and urea prices were low due to the drought in the southwest region. Development trend: The southwest drought has abated. It is expected that local urea fertilizer will recover in May, but domestic excess pressure is high this year, and the overall low urea price is a foregone conclusion. The company's “two-phase” natural gas pipeline has already been connected, but the gas price is still undecided; it is necessary to wait until the domestic gas price mechanism is straightened out before it is officially determined. Profit forecast and investment advice: We lowered the 2010 average price assumption for urea from 1,750 yuan to 1,600 yuan, and the average price assumption for 2011 from 1,750 yuan to 1,700 yuan. The progress of the “secondary chemical” project was delayed this year due to natural gas supply issues. The sales assumption was lowered from 900,000 tons to 800,000 tons, the 2010 EPS forecast was lowered by 47.78% to 0.27 yuan, and the 2011 EPS forecast was lowered by 7.63% to 0.69 yuan. We assume that the price of gas one chemical remains at the current level. The price of second chemical gas is 1.1 yuan/m3. Every future increase in gas price by 0.10 yuan/m3 will affect the company's EPS of about 0.065 yuan. Each increase in gas prices by 0.10 yuan/m3 affects the company's EPS by about 0.10 yuan. Second-quarter results are still difficult to meet expectations, and short-term stock prices should still be under downward pressure. Risk: The duration of severe weather across the country exceeded expectations, and excess conditions in the urea industry exceeded expectations.