From January to September 2010, the company achieved operating income of 164 million yuan, an increase of 56.00% over the previous year; net profit attributable to owners of the parent company was 32.1355 million yuan, an increase of 48.91% over the previous year, and EPS was 0.16 yuan. In the third quarter, the company achieved operating income of 68 million yuan, a year-on-year increase of 29.62%, a year-on-year increase of 22.36%; net profit attributable to owners of the parent company was 13.88,800 yuan, an increase of 1.35% year-on-year, an increase of 42.80% over the previous year, and an EPS of 0.07 yuan. The company's third-quarter results were better than expected. Sales volume in the downstream large and medium bus market continues to grow, and the company's operating income is still on an upward channel. The company mainly produces three retarder products: B type, R type and M type, and is the leader 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 September 2010, domestic buses and chassis achieved cumulative sales volume of 111,100 units, an increase of 26.47% over the previous year; in July-September, sales volume was 41,900 units, an increase of 11.83% over the previous year, an increase of 9.22% over the previous year, and bus sales showed a trend of increasing quarter by quarter. Benefiting from continued growth in the sales volume of large and medium buses, the company maintained a steady increase in operating income in the third quarter. As the peak season for bus sales approaches, we expect the company's revenue in the fourth quarter to maintain steady growth and be slightly better than the third quarter. Cost pressure is rising, and overall gross margin is expected to decline month-on-month in the fourth quarter. In January-September, the company's consolidated gross margin was 37.14%, down 4.09 percentage points from the previous year; in the third quarter, the company's consolidated gross margin was 37.60%, down 4.49 percentage points from the previous year, up 1.89 percentage points from the previous year. The main raw material for the company's products is enameled copper wire. The average price of copper for LME in the 3rd quarter of 2010 was 5,769 US dollars/ton for the 3rd quarter of 2010, up 10.2% from 5,236 US dollars/ton in the 2nd quarter. Moreover, since October, the price of copper has shown a clear upward trend. Currently, the price is 8,518 US dollars/ton. Considering the further increase in cost pressure, we expect the company's comprehensive gross margin for the fourth quarter to continue to decline after experiencing a brief recovery in the third quarter. ? The fee rate for the period remained at an all-time low. The company's expense rate for the January-September period was 16.13%, down 3.43 percentage points from the previous year. The company's expenses rate for the third quarter was 16.04%, up 1.86 percentage points from the previous year and down 0.12 percentage points from the previous month. Among them, the sales expense ratio was 8.44%, up 0.99 percentage points from the previous year and 0.43 percentage points from the previous year; the management expense ratio was 8.20%, up 0.28 percentage points from the previous year, down 0.30 percentage points from the previous month; and the financial expense ratio was -0.60%. Profit forecasts, investment advice and risks. Considering that the company's performance in the third quarter was better than expected, we raised the 2010-2012 EPS to 0.20 yuan, 0.23 yuan, and 0.28 yuan. Based on the closing price of 10.62 yuan on October 25, the corresponding dynamic PE was 53 times, 46 times, and 38 times, respectively. Given the company's high stock price and rising cost pressure in the fourth quarter, it maintained 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.