From January to December 2010, the company achieved operating income of 2.583 billion yuan, an increase of 72.30% over the same period last year; the net profit belonging to the owner of the parent company was 66.79 million yuan, an increase of 8.95% over the same period last year; and basic earnings per share was 0.47 yuan. In the fourth quarter, the company achieved operating income of 785 million yuan, an increase of 46.20% over the same period last year; the net profit belonging to the owner of the parent company was 11.17 million yuan, down 27.78% from the same period last year; and basic earnings per share was 0.08 yuan. The annual distribution plan is to increase 5 shares for every 10 shares and distribute 1.50 yuan in cash (including tax).

The rise in price and volume has led to a substantial increase in the company's operating income. The company is mainly engaged in the production and sales of precision copper pipe, copper pipe deep processing products and copper processing equipment, in which precision copper pipe and copper tube deep processing business accounts for more than 90% of the company's business income.

The selling price mode of the company's precision copper tube and copper tube deep processing products is "electrolytic copper price + agreed processing fee". Due to the determination of processing fee, the increase of electrolytic copper price will affect the selling price of these two kinds of products and affect their business income. During the reporting period, the average price of electrolytic copper rose by more than 40%; at the same time, the company's sales of precision copper tubes reached 38182 tons, up 34.49% from the same period last year, and sales of copper tube deep processing products reached 5624 tons, an increase of 52.21% over the same period last year. Together, the rising two factors led to an increase of 78.62% and 86.22% respectively in precision copper tube and copper tube deep processing business income.

The comprehensive gross profit margin fell. During the reporting period, the company's comprehensive gross profit margin was 7.92%, down 2.14% from the same period last year. In terms of products, the gross profit margin of precision copper tubes was 5.78%, down 2.06%; and the gross profit margin of copper tube deep processing was 13.91%, up 0.06%. In addition to the rise in the price of electrolytic copper, the decline in processing fees of precision copper tubes is also the main reason for the decline in gross profit margin of the above products, in addition to the rise in the price of electrolytic copper, the decline in gross profit margin of the above products is also the main reason for the decline of gross profit margin of precision copper tubes due to increased competition; due to the stability of processing fees and the tilt of products to high processing fee business, the gross profit margin of deep processing business increases slightly while digesting the adverse effects of rising copper prices. Due to the non-standardized products of copper processing equipment, the gross profit margin reached 35.71% during the reporting period, an increase of 5.84 percentage points.

The progress of the fund-raising project determines the company's performance in 2011. The company listed in 2009 when the three investment projects are: 1, precision copper pipe project technical transformation, the production capacity doubled to 60, 000 tons; 2, copper pipe deep processing technical transformation, the new production capacity of 5000 tons, a 1.7-fold increase in total production capacity of 8000 tons; 3, 10 sets of copper processing equipment technical transformation project. By the end of 2010, in addition to the precision copper pipe project, the other two projects were put into trial production in June and March 2011 respectively. Whether these two projects can be put into production successfully determines the company's performance growth in 2011.

Profit forecast. We estimate that the EPS of the company from 2011 to 2013 will be 0.52,0.69,0.80 yuan respectively. Based on the closing price of 18.55 yuan on March 28th, the dynamic price-to-earnings ratio will be 36 times, 27 times and 23 times respectively, maintaining the company's "overweight" rating.