1. Incidents Recently, we conducted field research on the editor of Hongda and communicated with relevant company personnel on the development of the company's main business, targeted expansion, and group assets. 2. Our analysis and judgment (1) The company's main business improved compared to the second half of 2008 and the first quarter of 2009. The company's main business mainly includes automotive interiors, stretch fabrics, general fabrics, and dyeing and finishing business. Among them, the automotive interior business is the most core competitive part of the company's traditional business, accounting for about 16% of the total revenue composition and 36% of operating profit. Due to its early start, the company has a presence in the automotive interior, especially in the mid-range and high-end automotive interiors. Shanghai Volkswagen and Shanghai GM are the company's main partners. Although the company was adversely affected by the downturn in the industry in 2008, the decline was controlled to a certain extent by developing new customers such as Chery. Driven by the rapid development of downstream automobiles, as a second-tier supplier to automobile manufacturers, orders from January to April 2009 were similar to the same period last year, and there was a slight increase in May over the same period last year. Stretch fabrics account for 21% of the company's sales revenue and about 24% of operating profit. The added value of stretch fabrics is relatively high, but low- to mid-range fabrics compete regardless of cost. In terms of prices, the price of stretch fabrics has rebounded. October last year was a period of sharp decline, then bottomed out in February and March 2009, and prices have now rebounded. In the long run, since stretch fabrics are mainly used for underwear and swimwear, etc., there will be some improvement as the global market gradually recovers. (2) Targeted additional distribution injected into B-super business brought about extended growth. On May 11, the company announced the targeted issuance of 44 million additional shares (issue price: 827 yuan) to acquire 100% of the shares of Shenzhen Wilder Medical Electronics Co., Ltd., of which Weald had a book value of 124 million yuan and a valuation of 360 million yuan. The target of the acquisition is mainly handheld and portable B-type ultrasound diagnostic instruments. Among them, handheld B-ultrasound production accounts for 60% of the country's share, and the company is expected to enter the lottery and other fields in the future. In 2008, Wilder's net profit was 20.69 million yuan, down from 2007. The main reason for the decline was a decrease in the company's outsourcing orders. At the same time, the subject of the acquisition made a performance promise, and the audited net profit achieved each year from 2009 to 2011 increased by no less than 15% compared to 2008, that is, the net profit for 2009 was not less than 23.79 million, the net profit for 2010 was not less than 27.36 million, and the net profit for 2011 was not less than 31.47 million. (3) The majority shareholders' assets are involved in various fields such as education, real estate, and home textile cities. The main businesses of the company-affiliated company, Hongda Holding Group, are also involved in the education industry, home textile city (combined rental and sale model), real estate (relatively small scale), and microfinance companies (established in September 2008, currently in a good profit situation). In the long run, we think the possibility of a group asset injection is relatively limited. 3. Profit forecasts and investment recommendations At the same time as the acquisition of Weilde Asset, Shen Guofu, the actual controller of HTC Economic Editor, assured that the compound growth rate of HTC Economic Editor in 2009-2011 was not less than 20% compared to 2008, that is, not less than 8.32 million in 2009, 10 million in 2010, and 12 million in 2011. Since the second half of 2008 is the most difficult time in the industry, we believe the company can achieve this goal; if the economy improves drastically, the company is expected to return to 2007 profits, and the performance may exceed expectations. Based on the company's promises, assuming that the company's targeted additional distribution will be completed in the first half of 2009, the company's net profit in 2009 and 2010 is estimated to be 32.5 million yuan and 38.5 million yuan, and the diluted EPS is 0.215 and 0.254 yuan respectively; currently, the company's stock price corresponds to 47 times the 2009 PE, and the market price has fully reflected the company's value, giving it a “neutral” rating.