Incident: On February 26, 2010, Huadong CNC (002248) released its annual financial report. We are commenting on this. Industry In-depth Report Industry Rating: The performance of companies that have increased their holdings has increased dramatically. In 2009, the company achieved operating income of 574 million yuan and net profit of 116 million yuan, up 36.38% and 128.64% respectively; profit growth was higher than revenue growth, mainly due to a 10.02% increase in comprehensive gross margin compared to 2008; earnings per share after dilution in 2009 were 0.97 yuan, which was basically in line with expectations. The company's profitability has increased. In 2009, we benefited from an increase in the sales ratio of CNC machine tools, especially gantry machine tools, and the overall gross margin of the company's products was further increased; at the same time, the increase in the sales ratio of CNC machine tools also increased the numerical control rate of the company's machine tool products, laying the foundation for improving the company's overall competitiveness, and the company's competitiveness within the industry was enhanced. The profitability of the company's large-scale CNC machine tool products can be maintained. Large CNC machine tool products (such as gantry machine tools) have high technical content and high entry barriers; at the same time, due to the continuous deepening of heavy industrialization in China, demand for large CNC machine tools continues to increase. The company is one of the few enterprises in China that have mastered the production technology of gantry machine tools, so the profitability of the company's large-scale CNC machine tool products can be maintained for several years. In 2010, the company will benefit from the “dual drive” of railways and nuclear power. The company is the only domestic enterprise that can produce Borg plate grinders. In 2010, the company will still benefit from high-speed rail construction. In October 2009, the company and Germany's Heath Zhuang Ming (Hong Kong) Co., Ltd. jointly increased the capital of Weihai Huadong Heavy Industries Co., Ltd. in cash. In the future, Huadong Heavy Industries will focus on the production and processing of large-scale, precision parts in the nuclear power industry and complete flexible production line equipment that has reached the world's advanced level. Profit forecasting and investment ratings. The company's earnings per share for 2010, 2011, and 2012 are expected to be 1.07 yuan, 1.46 yuan, and 1.63 yuan, respectively. Maintaining the previous “increase” rating, the company's target share price within 6 months is 52.00 yuan.