Investment logic. Gears are a steadily growing industry: gear transmission targets a wide range of downstream industries, so industry demand fluctuates less, and steady growth is the norm. Optimistic about the company's expansion beyond the metallurgical industry: the company has gained a good brand effect in the field of metallurgical gear transmission and is currently actively expanding markets outside of the metallurgical industry. The company has introduced new products continuously in recent years, and production capacity investment was completed at the end of 09. What the company needs in the future is to copy the successful experience of the metallurgical industry to other industries. According to our estimates, the demand for gearboxes in the lifting and transportation, building materials, and mining industries is 3 to 4 times that of the metallurgical industry, and the company has broad scope for development. Entering the field of wind power gearboxes: We estimate that the average annual market capacity of wind power gearboxes in China is 10 to 13 billion. Although the company entered this field relatively late, we believe that the company can achieve breakthroughs in customer segments with its good product cost performance ratio and after-sales service. Even if the company gains 5% of the wind power gearbox market share in the future, the revenue from wind power is comparable to the company's annual revenue in 2009, and the market potential is huge. The company has strong competitiveness: we believe that the company's competitive advantage comes from, 1) good mechanisms and management; 2) the continuous introduction of new products; and 3) the company's profit-oriented tradition. Looking at the short term, the company's operating slump is over: the company's revenue in '09 and '08 was the result of a combination of factors. We believe that the adverse factors have been eliminated in '10, and the company is entering a new round of growth. Profit forecasts and valuations. We expect the company to achieve sales revenue of 758, 1,127 and 1446 million yuan respectively in 10-12 years, with year-on-year increases of 41.8%, 48.8% and 28.3%, respectively, and net profit attributable to the parent company of 114, 178 and 230 million yuan respectively, equivalent to fully diluted earnings per share of 0.513, 0.804 and 1.037 yuan, respectively, with year-on-year increases of 38.3%, 56.7% and 29.1%, respectively. Considering that the company's compound growth rate for the next three years is over 30%, we gave the company a target price of 20 yuan for the next 12 months, equivalent to 25 times PE in 2011.