In 2010, the company achieved operating income of 257 million yuan, an increase of 54.87%; operating profit of 46.14 million yuan, an increase of 65.15% over the previous year; net profit attributable to owners of the parent company of 44.37 million yuan, an increase of 44.11% over the previous year; and EPS of 0.2 yuan, which is basically in line with expectations. The payout is 0.5 yuan (tax included) for every 10 shares. Benefit from the increase in sales volume for large and medium customers. The company is a leader in the retarder industry, mainly supplying large and medium buses, with a market share of about 40%. In 2010, the sales volume of commercial vehicles in China was 304,100 units, an increase of 29.90% over the previous year. The sales volume for large and medium customers was 118,600 units, up 34.02% year on year. Benefiting from continued growth in sales volume in the large and medium-sized bus market, the company's turbulence retarder revenue was 245 million yuan, an increase of 56.79% over the previous year. Among them, the revenue of B-series retarders for large buses and R series for medium-sized buses increased by 35.82% and 39.69% year-on-year respectively, accounting for 65.78% and 35.93% of revenue, respectively. We expect the sales growth rate of large and medium customers to continue to exceed the industry average in the future. The sales growth rate is expected to reach 17% in 2011, and the corresponding companies' demand for vortex retarders will grow by about 25%. Both gross margin and period expense ratio declined year over year. The company's gross margin in 2010 was 36.17%, down 3.7 percentage points from the previous year, mainly due to the 30.96% increase in the average purchase price of enameled wire in 2010. The fee rate for the period was 17.82%, down 4.5 percentage points from the previous year. Among them, the management expense ratio increased 2.6 percentage points year over year to 8.85%, the sales expenses rate decreased 2.7 percentage points year over year to 9.5%, and the financial expenses ratio increased 0.8 percentage points year over year to 1.3%. The company's future focus is on truck market development and hydraulic retarder research and development. (1) The vast majority of automobile retarders in China are used by large and medium passengers, and the assembly rate of truck retarders is low. If the discussion draft “Technical Conditions for Motor Vehicle Operation Safety” submitted for review in 2010 stipulates the installation of retarders in trucks, it is expected that heavy goods and semi-trailers will become growth points in demand for automobile retarders. Currently, the company is actively developing the truck market. The company's eddy-current retarder production expansion project has been completed by 90.48%, and is expected to reach production by the end of 2011. At that time, the company's production capacity will reach 50,000 units (25,000, 20,000, and 50,000 units of bus, truck, and semi-trailer retarders respectively), which can achieve a net profit of 60.19 million yuan. (2) The company is developing hydraulic retarders to improve the product structure, mainly for high-speed, high-power vehicles such as buses over 12 meters and trucks over 40 tons. Earnings forecasts and ratings. The 2011-2013 EPS is estimated to be 0.26 yuan, 0.32 yuan, and 0.41 yuan respectively. Based on the closing price of 15.98 yuan on March 24, the corresponding dynamic PE is 33 times, 23 times, and 18 times, respectively. Due to policy uncertainty, investors are advised to pay careful attention and maintain a “neutral” investment rating for the time being. Risk warning. (1) The risk that the price of raw materials such as enameled copper wire will rise beyond expectations; (2) the risk of policy uncertainty.