Industrial upgrading is reflected at many levels. In terms of process upgrading, from traditional workshops to division management, it is divided into core components and professional machine tool divisions according to product categories; in terms of product upgrades, it is mainly reflected in large-scale and heavy-duty CNC machine tools, development of large-scale gantry milling machines and floor boring machines, cutting into wind power and nuclear power components and equipment through processing services; in terms of functional upgrades, after acquiring Hirohisa Casting through capital increases, technical reforms are carried out to expand production capacity and extend the industrial chain; in terms of value chain upgrading, it is planned to use its own equipment advantages to enter large-scale equipment processing services such as wind power and nuclear power. As can be seen, the company's industrial upgrading is reflected at many levels, and there are no obvious sequencing issues, which are highlighted in product upgrades and value chain upgrades. The rise in demand for other CNC machine tools makes up for the decline in railway grinding machines. In the first half of the year, early orders for railway grinders were delivered at around 100 million yuan; no new orders have been accepted yet, but there are projects under discussion, and it is expected that orders for some railway grinders will be accepted in the future; in the first half of the year, orders for other CNC machine tools, such as gantry milling machines, increased rapidly to make up for the gap in the decline in railway grinders. Currently, the company's total handheld orders are around 500 million yuan. The increase in production has made machine tools larger. The company successfully raised 350 million yuan, mainly for 6 to 8 meter CNC gantry boring and milling machines, 260 to 320 mm CNC floor milling and boring machines, 16 to 22 meter large vertical lathes, etc. On the more than 100 acres of newly purchased land, the additional distribution project is in the land construction phase. It is expected that the plant will be completed by the end of the year, the equipment will be in place in the first half of next year, and prototypes will be produced in the second half of the year. Hirohisa Forging is based on internal related supply. After the capital increase in Hongjiu Forging and Casting in August 2008, Hongjiu Casting and Forging mainly supplied listed companies; at the same time, the production capacity of large castings and forgings was increased from 15,000 to 20,000 tons per year to 40,000 to 50,000 tons. Since then, Huadong CNC and Huadong Heavy Industries large machine tool castings have all been supplied by Hongjiu, and their share of external supply gradually declined. Last year, the casting revenue reflected in the main business was only 12.2 million yuan, a decrease of 57%. It can be seen that it is mainly based on internal supply. Huadong Heavy Industries develops major processing services for nuclear power and wind power equipment. Huadong Heavy Industries, which covers an area of more than 500 acres, has completed the construction of a three-span workshop. It is currently entering the indoor foundation construction stage. It is expected that the equipment will be in place by the end of the year, and next year it will begin to undertake processing operations and release performance. Huadong Heavy Industries is positioned as a processing service for nuclear power and wind power equipment, and is gradually entering the field of wind power and nuclear power equipment components through processing services. It is estimated that by 2013, the company's entire industry chain processing service revenue will exceed the machine tool business revenue. Profit forecasting and valuation. After completing the additional issuance, the company has a capital of 4.84 yuan per share and an undistributed profit of 1.34 yuan per share. The company's potential for transfer is huge. We expect to achieve earnings of 1.08, 1.45, and 1.92 yuan per share from 2010 to 2012, with a target price of 45 yuan, and raise the rating to “increase holdings.”