From January to June 2010, the company achieved operating income of 39 million yuan, a year-on-year increase of 33.42%; operating profit of 7.86 million yuan, an increase of 61.64%; net profit attributable to owners of the parent company of 7.59 million yuan, an increase of 31.33% over the previous year; and earnings per share of 0.09 yuan. The 2010 mid-year report distribution plan is: for every 10 shares, 3 shares will be transferred to 7 additional shares, and 1 yuan (tax included) will be distributed. The company expects net profit attributable to shareholders of listed companies to increase by 15% to 30% year-on-year from January to September 2010. Judging from single-quarter data, in the second quarter of 2010, the company achieved operating income of 0.23 million yuan, a year-on-year increase of 53.97%; operating profit of 3.92 million yuan, an increase of 123.26%; net profit attributable to owners of the parent company was 3.44 million yuan, an increase of 9.67%; and earnings per share for the second quarter were 0.04 yuan/share. Operating revenue from leading products increased year over year. The company has 65 types of drugs in 5 dosage forms, and 26 types included in the national medical insurance catalogue, mainly proprietary Chinese medicines for the throat, cold, and gastrointestinal diseases. From January to June 2010, Shuangliou Fengsan achieved revenue of 2019,900 yuan, an increase of 51.38% over the previous year; Zhongguanjing Film achieved revenue of 15.2593 million yuan, an increase of 34.43% over the previous year. The sum of the revenue of the above two products reached 91.35% of the company's revenue. Overall gross margin declined. From January to June 2010, the company's comprehensive gross profit margin was 55.03%, a year-on-year decrease of 4.1 percentage points. Among them, the consolidated gross profit margin for the second quarter was 55.87%, a year-on-year decrease of 3.69 percentage points; compared with the gross margin for the first quarter, it increased 2.06 percentage points from month to month. The increase in raw material prices for the company's main products led to a decline in overall gross margin. The ability to control expenses was weakened during the period. From January to June 2010, the company's expenses rate for the period was 48%, an increase of 0.57 percentage points over the previous year. Among them, the sales expenses ratio was 26.9%, an increase of 2.85 percentage points over the previous year; the management expenses ratio was 20.06%, a decrease of 3.75 percentage points; and the financial expenses ratio was 1.03%, an increase of 1.46 percentage points over the previous year. The company's current revenue scale is small, and fluctuations in related expenses have a big impact on the company's profits. Jinsha Pharmaceutical's return on investment is stable. The company owns 35.53% of Jinsha Pharmaceutical's shares. From January to June 2010, the company confirmed an investment income of 5,5161,000 yuan according to the investment ratio. Jinsha Pharmaceutical Co., Ltd. was established in September 1995 and is a state-owned joint-stock enterprise controlled by Baisha Group. The company's leading products, acupuncture tablets, and menstrual blood tablets, have all been selected into the National Essential Medicines, Protected Varieties of Domestic Traditional Chinese Medicine, and the National Basic Medical Insurance Medication List, all of which are exclusive varieties in the country. With the implementation of the essential drug system, the company will obtain a stable return on investment from Sands Pharmaceuticals. Profit forecast and rating: We expect the company's earnings per share for 2010-2012 to be 0.21 yuan, 0.23 yuan, and 0.27 yuan, respectively. Based on the closing price on August 4, the corresponding dynamic price-earnings ratios are 120 times, 109 times, and 93 times, respectively, maintaining the company's “neutral” investment rating. Risk warning: (1) the risk that the company is small in size, has a single dominant product, is fiercely competitive in the industry segment, and market share will be seized; (2) the risk of fluctuating raw material prices.