From January to June 2010, the company achieved operating income of 96.33 million yuan, an increase of 82.15% over the previous year; net profit attributable to owners of the parent company was 18.261,700 yuan, an increase of 131.41% over the previous year, and EPS of 0.09 yuan. In the second quarter, the company achieved revenue of 55.55 million yuan, a year-on-year increase of 47.40%, an increase of 36.18%; net profit attributable to owners of the parent company was 9.702,800 yuan, an increase of 57.77% year-on-year, an increase of 13.48% over the previous year, and an EPS of 0.05 yuan. The company's performance is in line with expectations. The clear recovery in sales volume in the downstream large and medium bus market led to a sharp increase in the company's revenue. The company mainly produces three retarder products: B type, R type and M type, and is in a leading position in the industry. Among them, the B-type and R-type retarders are mainly used in large and medium-sized buses, and are the main source of the company's revenue. The M-type retarder, on the other hand, is used in heavy-duty cargo trucks to open up a new market, and sales volume has not yet reached scale. From January to June 2010, the total sales volume of large and medium buses in China was 50,400 units, an increase of 49.52% over the previous year. Benefiting from a marked recovery in the sales volume of large and medium buses, the company's operating income in the first half of the year increased sharply by 82.15% year on year. Among them, the growth rates of B-type and R-type retarders were 83.56% and 91.91% respectively. As the peak season for bus sales approaches, we expect the company's revenue in the second half of the year to maintain steady growth and be better than the first half of the year. In the first half of the year, the company's consolidated gross margin fell 3.5 percentage points year on year, in line with expectations. In January-June, the company's consolidated gross margin was 36.81%, down 3.57 percentage points from the previous year; in the second quarter, the company's consolidated gross margin was 35.72%, down 3.90 percentage points from the previous year, down 2.60 percentage points from the previous year. The main raw material for the company's products is enameled copper wire. We have previously predicted that as the economy improves, the overall copper price shows a gradual upward trend, the company's profitability will decline accordingly. In the future, we expect copper prices to continue to maintain a high and volatile pattern. Affected by this, we expect the company's gross margin for the full year of 2010 to be around 36%, down about 4 percentage points from 2009. The company's expense ratio for the first half of the year fell sharply by 9 percentage points year on year, which was clearly better than expected. In January-June, the company's fee rate for the period was 16.19%, down 8.71 percentage points from the previous year, which was significantly better than our expectations. Among them, the sales expense ratio was 7.35%, down 4.38 percentage points from the previous year; the management expense ratio was 9.32%, down 6.48 percentage points from the previous year. They are the main contributors to the decline in the company's expenses during the period. The significant decline in the cost rate for the period was one of the main reasons for the sharp increase in the company's performance in the first half of the year. Profit forecasts, investment advice, and risks. The company's 2010-2012 EPS is expected to be 0.17 yuan, 0.19 yuan, and 0.23 yuan respectively. Based on the closing price of 11.87 yuan on August 23, the corresponding dynamic PE is 69 times, 62 times, and 52 times, respectively. The company's stock price is too high, maintaining a “neutral” investment rating. The risks to be aware of include the risk that the continued rise in copper prices will further eat up the company's performance, and the risk that the M-type retarder market will be more difficult to expand and not achieve the expected sales target.