The company stopped the "car driving recorder" and other two projects.

On January 26, 2011, Terjia issued an announcement to stop the research and development of "vehicle driving Recorder" and "engine Dynamometer". The focus of the R & D center will be shifted to the optimization and expansion of eddy current retarders and the development of hydraulic retarders.

It has little impact on the current net profit and maintains the profit forecast unchanged.

The write-off of 2.1789 million yuan of R & D expenses for the project will be included in the 2010 profit and loss, which we do not think will have a significant impact on the current net profit, which is expected to account for about 4% of the company's 2010 net profit before tax. we still maintain our profit forecast of 0.22 yuan in 2010.

Concentrate resources and develop the main business of retarders.

The company stops the research and development of "automobile driving recorder" and "engine dynamometer project" this time, hoping to concentrate all energy on the main business of the retarder that the company has advantages. the company hopes to complete the optimization and expansion of eddy current retarder and the research and development of hydraulic retarder as soon as possible, so as to make full preparations for the coming industry opportunities. At present, the research and development of the company's hydraulic retarder is progressing smoothly. Once the R & D is successful, the company will become the first domestic enterprise with hydraulic retarder research and development technology. We believe that this has a great stimulating effect on the promotion of the company's brand effect and the growth of sales.

Valuation: maintain the "buy" rating and the target price of 28.75 yuan.

We use the relative valuation method to value the company, give the company 13 times the average price-to-earnings ratio of the auto parts industry after the high-speed growth period at the end of 2016, and discount its market value to 2011 at a cost of equity capital of 7.6%. Get the company's target price of 28.75 yuan. The company's stock price has been greatly adjusted in the early stage, but the fundamentals of the company and the industry have not changed significantly. We are still optimistic about the explosive growth opportunities brought by the revision of industry standards, keeping the "buy" rating and the target price of 28.75 yuan unchanged.