From January to September 2009, the company achieved operating income of 674 million yuan, a year-on-year decrease of 45.25%; operating profit of 56 million yuan, a year-on-year decrease of 80.13%; net profit attributable to owners of the parent company was 46 million yuan, a year-on-year decrease of 77.64%; and basic earnings per share were 0.19 yuan. Among them, in July-September, operating income was 240 million yuan, down 21.5% year on year and 17.9% month on month; net profit attributable to owners of the parent company was 6.87 million yuan, down 85.6% year on year and 78.9% month on month; basic earnings per share were 0.03 yuan. The sharp drop in the price of glyphosate caused a sharp decline in the company's performance. In the first three quarters, prices of the company's products generally fell. Although sales volume of the main product, glyphosate, was basically stable, the sales price dropped sharply. The average price for the first three quarters was 20,700 yuan/ton, a year-on-year decrease of 73.26%. Inventory prices fell and preparations were made for major resale. The company's asset impairment losses in the first three quarters were -81.67 million yuan, mostly due to inventory depreciation losses. After deducting asset impairment losses, the company lost money for the first 3 quarters. Glyphosate sales in the fourth quarter were not optimistic, and the future can still be expected. Currently, the price of glyphosate is around 22,000 yuan/ton. Since foreign demand has not improved significantly, and domestic glyphosate production capacity is overcapacity, it is expected that it will still be difficult for glyphosate prices to rise significantly in the fourth quarter. Currently, the price of glyphosate is below the cost line of some companies, and there is a possibility that the industry will be reshuffled. Demand will gradually recover next year, and production of 10% glyphosate solution will stop, and the gap between supply and demand for glyphosate will narrow, and prices will rebound somewhat. Although Xingnuo (the company holds 50% of the shares), 20,000 tons/year of diglyphosate has been completed but not put into production. If the market picks up, the company's performance will increase dramatically. Strengthen upstream raw material support and reduce costs. The company plans to build 300,000 tons/year of ionic membrane caustic soda, and it is estimated that the first phase of 100,000 tons/year of caustic soda will be completed and put into operation next year. After completion, the company's supply of caustic soda and chlorine will be more guaranteed. In addition, the 20,000 tons/year glyphosate technical improvement project and 34,000 tons/year iminodiacetonitrile in Chongqing are under construction and are expected to be completed and put into operation by the end of the year. Profit forecast. We expect the company's 2009-2011 EPS to be 0.28 yuan, 0.39 yuan, and 0.61 yuan respectively. The corresponding dynamic price-earnings ratios are 38 times, 27 times, and 17 times, respectively. The valuation is higher than the industry average, and we maintain the company's “neutral” investment rating. Risk warning: The rebound in glyphosate prices may be less than expected.