Huaxing Chemical announced its 2009 annual report. EPS is 0.02 yuan. It plans to use the capital reserve fund to increase 2 shares for every 10 shares and distribute a cash dividend of 0.2 yuan (tax included). 1. Performance declined sharply, and net cash flow from operating activities was negative. The company achieved total revenue of 87.0212,500 yuan, a year-on-year decrease of 37.05%. The company achieved net profit of 4.9219 million yuan, down 97.13% from the same period last year, EPS was 0.02 yuan, and 0.70 yuan in the same period last year. The main reason is a sharp drop in operating income and profit due to a drop in sales prices for some of the company's products. Affected by the financial crisis, due to the slow return of capital in the international market, net cash flow from the company's operating activities throughout the year was 7,516,200 yuan, a decrease of 106.33% over the same period last year. 2. The company's operating conditions are expected to improve in 2010. Main reasons: 1. As the global economic situation improves, the price of basic chemical raw materials bottomed out and rebounded. As the global pesticide market and channel inventory levels decline, these factors are expected to push pesticide product prices into an upward channel. 2. With the country's intensification of acquisitions, mergers, restructuring and integration of the pesticide industry, the entry threshold for the pesticide industry is raised dramatically, and many enterprises face the risk of being evicted, and the pesticide industry will usher in a round of policy “reshuffle.” 3. The company has a series of measures to improve production and operation: in terms of foreign sales, the company will increase the construction of original drug sales teams; establish branches or offices in regions where conditions are met to strengthen foreign trade business. In terms of domestic sales, in 2010, the company will increase the recovery of arrears, strengthen the original drug sales team, implement changes in the formulation sales model, and improve the sales network layout. The price of glyphosate raw materials fluctuates greatly, and the market risk is also relatively high, while the price of glyphosate preparations is relatively stable, and in the face of end customers, the added value is high. The company has stepped up efforts to adjust the product structure and shift from the original drug to the formulation to resist the risk of product price fluctuations. 3. Profit Forecast and Investment Suggestions: Considering the recovery of the licorice industry and taking into account the company's production and operation situation, Huaxing Chemical's EPS forecasts for 2010 and 2011 were lowered to 0.32 yuan and 0.36 yuan. Maintain a “Recommended” rating.