The company belongs to the component industry. Its main business is the development and production of fine and special enameled wire. It is the largest professional fine enameled wire manufacturer in China. The company's performance was in line with our expectations. In 2010, the company achieved main business revenue of 983 million yuan, up 92.51% year on year; operating profit of 16.75 million yuan, up 2108.69% year on year; net profit attributable to owners of the parent company was 15.63 million yuan, up 389.71% year on year; basic income per share was 0.14 yuan; the distribution plan was to send 2 shares for every 10 shares to increase 4 shares and 0.4 yuan (tax included). Production and sales have reached record highs, revenue has increased dramatically, and gross margin has increased. In 2010, with the recovery of industrial prosperity, the company's production and sales of fine enameled wire products were booming, and the production and sales volume of conventional wire and self-adhesive wire exceeded 10,000 tons, causing the company's revenue scale to rise sharply. The company's consolidated gross profit margin in 2010 was 9.06%, up 0.71% year on year. The main reason for the slight increase in gross margin during the reporting period was the increase in capacity utilization. Considering that copper prices are currently running at a high level of around 9,500 US dollars/ton, there is not much room for increase, and the company's gross margin is expected to continue to rise in the future. The ability to control expenses was improved during the period. The company's expense ratio during the reporting period was 6.87%, a year-on-year decrease of 1.1%. Among them, the sales expense ratio was 1.71%, down 0.58% year on year; management expense ratio was 3.74%, down 0.79% year on year; and finance expense ratio was 1.42%, up 0.27% year on year. The decline in the company's sales expense ratio and management expense ratio is mainly due to the scale effect brought about by the sharp increase in revenue. The reason for the change in financial expenses ratio is that the company drastically increased bank loans to cope with the shortage of working capital brought about by the rise in copper prices. Expanding the southwest market will become a new growth point. The company's sales network mainly covers the Yangtze River Delta and Pearl River Delta regions. At present, the company has begun to build a sales system in the southwest region. With the future shift of the electronics industry to western cities such as Chongqing and Chengdu, the development of the western market is expected to become a growth point for the company's future performance. Targeted distribution may be restarted in the future. On June 24, 2010, the company plans to acquire 100% of the shares of Shanghai Yanghang Copper Co., Ltd. with a targeted increase of about 77.98 million shares at 13.17 yuan/share. Yang Xing Copper's main business is the production of electromagnetic wires for high-voltage and large-capacity transformers. This restructuring can expand the company's business scope and increase the company's profitability. The net profit of Yanghang Copper is estimated to be about 78 million yuan in 2011. Due to the difficulty of completing the asset evaluation in a short period of time, the company terminated the targeted additional restructuring plan on December 7 last year and promised not to launch a new restructuring plan within three months. Now that the commitment period has ended, the company may restart the targeted additional distribution and restructuring plan. We expect the company's EPS for 2011-2013 to be 0.15 yuan, 0.24 yuan, and 0.35 yuan respectively; based on the closing price of 13.51 yuan on March 15, the corresponding dynamic price-earnings ratios are 88 times, 57 times, and 38 times, respectively. Considering the company's current valuation level and the uncertainty of restructuring, the company's “neutral” investment rating was maintained. Risk Warning: 1. Prices of raw materials have risen. 2. Restarting the targeted release project failed.