In 2010, the company achieved operating income of 1,002 billion yuan, a year-on-year increase of 2.61%; operating profit of 3.09 million yuan, a year-on-year increase of 58.79%; net profit attributable to the parent company of 33.52 million yuan, a year-on-year increase of 34.35%; earnings per share of 0.08 yuan; and the distribution plan was to pay a cash dividend of 0.5 yuan (tax included) for every 10 shares. The company uses ceramic tiles as its main product and targets middle and high-end customers. The product brand Smick is a well-known brand in the industry, and its technology accumulation and equipment are in a leading position in the industry. Revenue growth was corrected in the fourth quarter, and operations that did not increase revenue or profit were under cost pressure. The company's revenue increased by 4.02% in the fourth quarter of 2010, changing the declining trend of revenue growth in the third quarter. The main reasons are: 1. The production capacity of the Jiangxi production base was utilized; 2. The domestic commercial housing sales area in the fourth quarter was 412 million square meters, an increase of 16.57% over the previous year, reversing the decline in sales area in the third quarter, and demand for ceramic tiles improved. 3. The company has increased the construction of sales channels and pricing management. However, the company's fourth quarter operating profit was -10.86 million yuan, a year-on-year decrease of 209.6%. The main reason was the decline in the company's gross margin in the fourth quarter and the increase in the period expense ratio. The company's comprehensive gross margin for the fourth quarter of 2010 was 26.04%, down 5.45 percentage points from the previous year. The reason for the decline was due to the rise in raw materials and fuel prices; the cost ratio for the fourth quarter was 27.95%, up 0.85 percentage points year on year, of which management expenses increased by 1.12 percentage points, financial expenses increased by 1.02 percentage points, and sales expenses fell 1.29 points. Non-operating income improved the company's performance in the fourth quarter. The company's net non-operating income in 2010 reached 27.95 million yuan, 1.64 times the total profit, so there was no loss in the fourth quarter of 2010. Non-operating income mainly comes from Jiangxi Smick Ceramics receiving government subsidies for channel construction and subsidies granted by the Shanghai Economic and Credit Commission and the Minhang Economic Commission for the cost of issuing collective notes to the company. In 2011, investments in lithium porcelain clay mines and lithium batteries were further expanded. The company is actively expanding the lithium-containing porcelain clay development business. The company cooperated with the People's Government of Yifeng County in Jiangxi Province to develop a lithium-containing porcelain ore mine, which is currently being explored. A letter of strategic intent has also been signed with Changyuan Technology Industrial Co., Ltd. If the above investment intentions can be implemented within 2011, it is expected that corresponding investments will occur. The company will further expand its industrial chain, and at the same time, the refining and deep processing of rare metals will also generate additional investment benefits for the company. Consumption upgrades, Disneyland, and affordable housing construction are likely to benefit. The company's products are mainly aimed at high-end customers, and with the increase in domestic consumption revenue, the demand for the company's products will also benefit further. At the same time, Jiangxi Smick's products are for the mid-range, so they can also be used in the construction of guaranteed housing. The company is located in Shanghai near the Disneyland construction site, and has the advantage of getting first month after month with buildings close to water. Profit forecast and valuation: The company's 2011-2012 EPS is expected to be 0.12 yuan and 0.15 yuan respectively, and yesterday's closing price is 12.95 yuan. The corresponding PE is 108 times and 86 times, respectively, maintaining the company's “neutral” rating for the time being.