The 2009 annual report showed impressive results. The company achieved net profit of 116 million yuan and EPS of 0.97 yuan in 2009, which is basically in line with our profit forecast. Main revenue and net profit belonging to the parent company increased by 36.38% and 128.64%, respectively, and gross margin increased by nearly 10 percentage points, mainly due to the high gross margin of high-speed rail equipment, and its share of revenue increased dramatically. High-speed rail equipment orders are still worth looking forward to. High-speed rail track plate CNC grinder orders are the main highlight of the 2009 and 10-year results: in 2009, high-speed rail equipment order revenue of 300 million yuan was achieved, accounting for more than 50% of revenue, and the remaining 100 million yuan order will be implemented in 2010. Demand for new and maintenance guarantees the demand for high-speed rail machine tools in 2010: at present, China's high-speed rail mileage reached 3,300 kilometers, the highest in the world. According to the medium- to long-term railway construction plan, 7,000 kilometers of high-speed passenger lines will be built by 2010, and 16,000 kilometers of high-speed passenger lines will be built by 2020. Demand for CNC equipment for high-speed rail track plates is still high, and railway operation and maintenance will still require related equipment after the high-speed rail is completed. The company is an enterprise in the domestic machine tool industry capable of developing and producing large-scale CNC rail plate molding and grinding machines, and all technical requirements and indicators are at the leading international level, breaking the long-term monopoly of German companies in this field. As high-speed rail tenders continue, follow-up orders are worth looking forward to. Future growth highlights the expansion of demand for large CNC machine tools and the commissioning of Huadong Heavy Industries. Demand in the machine tool industry is recovering, and demand for CNC machine tools is bottoming out. Demand for CNC machine tools, especially large and heavy, is strong. With the gradual recovery of the economy, demand for large and heavy machine tools will increase for high-precision products such as downstream aerospace, railways, ships, and metallurgy. Coupled with the increase in the proportion of machine tool localization rates, the growth in machine tool demand will accelerate. Expanding production capacity enhances competitiveness. The company cooperates with Axcon to produce parallel motion machine tools, which will improve the accuracy and stiffness of machine tools, expand the professional application fields of machine tools, and enhance technical strength, thereby improving the competitiveness of the company's products. The company plans to invest 400 million yuan (of which 350 million will be raised through public distribution) to carry out large-scale machine tool technical reforms. The project will increase annual revenue by 530 million yuan, and increase profit by nearly 100 million, which is equivalent to double the current sales scale. The company's products have developed into high-end products for large-scale heavy machine tools. The company cooperated with Heath Zhuang Ming to build Huadong Heavy Industries, thus entering the field of heavy precision machine tools and heavy processing, which will effectively enhance the company's large-scale machine tool manufacturing capabilities. The cumulative increase was large, and the valuation was at the high end of the industry, and the rating was downgraded to “neutral.” The annual EPS for 10E/11E/12E was 1.23/1.60/2.17 yuan respectively, and the compound profit growth rate reached 31%. Currently, the stock price corresponding to 09/10/11 PE is 47 times, 37 times, and 28 times, respectively. The valuation is at the high end of the machine tool sector. The stock price reflects the company's valuation premium as a high-growth company. We downgraded the rating to “neutral”. We believe that the cumulative increase in the previous period is large, and there are many profit margins, so we need to wait for the right time to intervene. Risk analysis: Cooperation with Heath Zhuang Ming initially adopted the Heath brand. There is uncertainty about how the company can digest technology to establish its own brand and other advantages.