Key investment points: Performance: Revenue growth was greater than net profit growth. Revenue of 10.884 billion yuan was achieved in 2011, an increase of 35.02% over the previous year. Net profit attributable to shareholders of listed companies was 159 million yuan, an increase of 4.38% over the previous year. It achieved basic earnings of 0.67 yuan per share in 2011, an increase of 4.69% over the previous year. The reason for the increase in revenue The sharp increase in the company's revenue in 2011 was mainly due to a sharp increase in the company's trade volume of profile products, aluminum ingots, and aluminum bars. Gross profit margin fell from 3.87% in 2010 to 2.97% in 2011. On the one hand, the gross margin of trade fell, and on the other hand, the gross margin of metal processing fell due to rising costs. The company's pricing model can reduce price fluctuations. The company's aluminum sheet products use a pricing model of “raw material price+processing fee at the time of delivery”. Therefore, if raw material prices fluctuate greatly during the period from material procurement and production to sales, the gross margin of related products will inevitably be affected, which in turn affects the stability of the company's profit level. Another of the company's main products, aluminum alloy profiles, is a strictly customized product. The price is determined using “raw material price+processing fee at the time of order”, so fluctuations in raw material prices have little impact on its gross margin. The company uses a pricing method based on raw material costs plus processing fees, and has considerable ability to pass on the price risk of upstream products. The company's cash flow changed greatly, and the company's net cash flow from operating activities fell 100.89% year on year. The main reason for this was that notes receivable increased by 179 million yuan year on year at the end of the period, and mainly due to a year-on-year decrease of 57 million yuan in notes payable at the end of the period, resulting in a sharp drop in net cash flow from operating activities compared to the previous year. The net cash flow from the company's investment activities fell 209.70% year on year during the reporting period. The main reason for this was a sharp increase in investment in the current period of the “energy saving aluminum alloy profile project with an annual output of 50,000 tons”, which led to a sharp increase in expenditure on “cash payments for the purchase and construction of fixed assets, intangible assets, and other long-term assets”. The net cash flow from the company's fund-raising activities increased 52.32 times year-on-year during the reporting period. The main reason was that the company spent 50 million yuan on bank acceptance notes issued between parent and subsidiary companies due to purchase payments during the same period last year, leading to more “other cash payments related to fund-raising activities” expenses. The company's profile profitability may be under pressure. The company's construction profiles account for more than 60% of the company's total revenue, and the production capacity is around 80,000 tons. Thirteen new extrusion production lines, 2 vertical powder coating production lines, and 1 vertical fully automatic oxidation electrophoresis production line were built. Of these, 6 extrusion production lines and 2 powder coating production lines were put into operation in the fourth quarter of 2011. The rest of the projects are in the process of installation and commissioning. After the new production capacity was put into operation, the total production capacity of building profiles jumped from 80,000 tons to 130,000 tons. The company's product structure was optimized, and production capacity bottlenecks were effectively solved. However, the company's construction profiles are mainly used in the real estate market. The real estate market shows no signs of relaxation of regulatory policies. Demand in the real estate market is still sluggish, and the profitability of the company's main business may be under pressure. Valuation and investment recommendations We expect to achieve revenue of 122.07 billion yuan and 13.112 billion yuan, respectively, and realized net profit of 221 million yuan and 262 million yuan respectively. We expect to achieve earnings per share of 0.93 yuan and 1.10 yuan respectively in 12-13. The corresponding price-earnings ratios are 9.8X and 8.3X, respectively. The valuation advantage remains, and the buying rating is maintained. However, we will continue to monitor the demand situation in the real estate market and will not rule out the possibility of lowering the profit forecast. Risks indicate the risk that downstream demand, especially real estate demand will continue to decline, and the risk of raw material prices rising.