Xiangfan May 25 pump Industry Co., Ltd. is a holding enterprise of Hubei Dongfang Chemical Co., Ltd. (weapon 525 Plant) under China Arms Industry Corp. mainly engaged in the design, manufacture and sale of corrosion-resistant and wear-resistant special industrial pumps, valves and stainless steel castings, the main products include flue gas desulfurization circulating pumps and phosphate compound fertilizer pumps. The company has more than seven hundred employees, with a sales income of 306 million yuan and a profit of 40 million yuan in 2008. In 2009, the sales revenue was 400 million yuan and the profit was 54.14 million yuan. This year, it is estimated that the sales revenue will exceed 500 million yuan and the profit will be 76 million yuan. The company plans to reach 1.5 billion of sales revenue by the end of the 12th five-year Plan.

The performance of Beihua shares has been declining since it was listed in 2008, and it has made a profit by financial subsidies for two consecutive years, so asset restructuring is imminent. We believe that the volume of the May 25th pump industry acquired by this fixed increase is equal to that of Beihua shares, excluding equity dilution, it will thicken Beihua shares EPS0.35 yuan, after the completion of the acquisition, the EPS of listed companies in 2010 should be 0.45 yuan. Considering the scarcity of May 25th pump industry as an industrial special pump and the high growth of nuclear power castings, the company is given 50 times PE and a reasonable stock price of 22.50 yuan.