The company is a small to medium private enterprise. It mainly produces electric eddy current retarders for auxiliary braking, and the vast majority of them are equipped with large and medium buses. From January to December 2008, the company achieved operating income of 153 million yuan, a year-on-year increase of 12.93%; operating profit of 1,401 million yuan, a year-on-year decrease of 34.37%; net profit attributable to owners of the parent company of 24.79 million yuan, an increase of 3.65%; and diluted earnings of 0.25 yuan per 10 shares, with a dividend of 1.00 yuan per 10 shares. The company's operating profit decreased by 34.37% year over year. 1) In 2008, the company's management expense ratio increased by 4.95 percentage points year on year. We believe that as a newly listed company, the company's governance structure is not perfect, management fees and listing expenses have increased dramatically, and at the same time, amortized employee benefits of 1.94 million yuan in 2007; 2) Gross margin fell 2.32 percentage points year on year, and the company's average procurement cost of enameled wire, the main raw material in 2008 fell 2.41% year on year. We believe that the decrease in gross margin was mainly due to lower product prices. The preferential “halving” income tax policy was abolished. In 2008, the company was again recognized as a high-tech enterprise to enjoy a 15% preferential tax rate, but the preferential policy of “extending income tax by half for three years (2007-2009)” granted to the company by Shenzhen was abolished, raising the company's nominal income tax rate from 7.5% in 2007 to 15%, and the actual income tax rate increased accordingly to 9.82% (2.33% in 2007). The government increased subsidies to make the company's net profit exceed expectations. The company's 2008 EPS was better than our previous expectations of 0.18 yuan, but the portion that exceeded expectations came entirely from government subsidies, including the Development and Reform Commission's 10 million yuan subsidy for the company's new project research and development and the Shenzhen Municipal Government's 2 million yuan innovation subsidy, accounting for 48.4% of the company's net profit. After deducting non-recurring profit and loss, the company's net profit decreased by 44.44% year on year. The government supports or opens up new horizons for companies. The company's core product, the eddy-current retarder, has the advantages of safety and environmental protection. Although the technology is relatively mature, the production scale and market capacity are very small. We believe that high prices and lack of policy support are the key constraints, and the way to solve this problem is “government support - effective demand - economies of scale - price reduction - increased demand”. According to our analysis, new energy, energy saving, and environmental protection are important ideas guiding the future automobile and accessories industry. Based on this, we believe there is a possibility that the government will continue to support vortex retarders, mainly for new products By subsidizing research and development by the government, standardizing industry standards, and expanding the scope of mandatory allocation (such as including some special purpose heavy trucks, special vehicles, etc.), the company, as the leader in this industry segment, will benefit first. Currently, the company mainly supplies large and medium buses. We expect the large and medium passenger market to drop by at least 5% in 2009, and whether the company can open up the heavy truck market depends critically on the government's support and whether it can finally achieve economies of scale.