Incidents:

ST Huangtai announced on January 14 that the 2011 results are expected to turn a loss into a profit, mainly because the company completed debt restructuring with Gansu Hanyu Investment Co., Ltd. and the Wuwei branch of Agricultural Bank of China Co., Ltd., respectively, and generated a total of 305.15,500 yuan in debt restructuring income, which was included in the non-operating income accounting for the reporting period. The company's net profit for 2011 is estimated to be 3 to 5 million yuan, equivalent to EPS 0.017 yuan to 0.028 yuan. The loss for the same period last year was 59,3991 million yuan, and EPS was -0.33 yuan.

Profit forecasts and investment recommendations:

Since the company's own liquor business has made great progress, there are expectations of restructuring, but the progress of the restructuring in 2012 was delayed, and there is still uncertainty. If the restructuring is successful, from an optimistic perspective, the 2011-2013 EPS is expected to be 0.025 yuan, 0.69 yuan, and 1.48 yuan, corresponding to 433 times, 16 times, and 7 times PEs, so the recommended rating is maintained.

Risk warning:

If the company's merger and acquisition plan is not approved or the profitability of the acquired company does not meet expectations, PE is too high, forming a valuation bubble.