Investment highlights:? The company mainly engages in the production and sale of precision copper tubes, copper processing equipment, and copper tube deep processing products. It is the 3rd largest supplier of air conditioning copper pipes in China and the 2nd largest air conditioning copper tube manufacturer in South China. The revenue from these three products accounts for more than 96% of the company's total revenue. Among them, precision copper tubes are the company's leading product, accounting for 82.98%, 85.22%, 80.0% and 74.33% of revenue in the past three years, respectively, and 59.18%, 67.05%, 58.04% and 55.95% of gross profit, respectively. The company's precision copper tubes are mainly produced by the holding subsidiary Jingyi Wanxi, and the company's holding ratio is 75%. There are currently 3 production lines, each with a production capacity of 10,000 tons, with a total production capacity of 30,000 tons. The production and operation situation in 2009 was slightly better than in 2008. Production was lower in January and February due to the financial crisis, but with the implementation of economic stimulus policies such as household appliances going to the countryside, production increased month by month, and we expect annual production to exceed 28,000 tons. The precision copper tube part of the fund-raising project will not be put into operation until the end of the decade, so it does not contribute much to the company's 10-year output. The company is considering increasing the production capacity of existing equipment through technical reforms. If successful, production capacity can be increased by more than 20%. We assume that the company's 10-year production of precision copper tubes is 33,000 tons. With the commissioning of the fund-raising project, the company's production capacity will increase dramatically in 11 years, from 30,000 tons to 60,000 tons. Due to a production process, we assume that the company's output of precision copper tubes in 11 years will be 42,000 tons. The company's copper tube deep processing products are produced by the parent company and its wholly-owned subsidiary Wuhu Jingyi, with a current production capacity of 3,000 tons. Some fund-raising copper processing parts projects were put into operation in 2009, and we expect production to be close to 3,600 tons in 2009. The copper processing parts fund-raising project will be fully put into operation in September '10, and production capacity will increase to 8,000 tons at that time. However, whether production can reach production must be determined based on the order situation negotiated by downstream customers. We assume that the production of copper tube deep processing products in 10 and 11 years will be 5,000 tons and 6000 tons, respectively. The company's precision copper tubes and copper tube deep processing products are mainly produced according to customer orders. The pricing method for the products is “electrolytic copper price+agreed processing fee”. The company's procurement of electrolytic copper raw materials mainly uses two methods: long futures orders and point prices. Since the company adopts the strategy of “fix production by sales, order by production”, the sales price and purchase price of electrolytic copper are basically locked, and the company basically does not need to bear the risk of fluctuations in the price of electrolytic copper. Therefore, the profitability of the company's precision copper tubes and copper tube deep processing products mainly depends on production volume, processing cost level and processing cost control. The company's copper processing equipment is produced by Guanbang Technology, a wholly-owned subsidiary. The company is the main equipment supplier for domestic copper tube processing companies. In the past 4 years, the company's market share for key equipment in domestic copper tube continuous casting and rolling production lines has reached 75%. It has the technical level of import substitution, and has successfully exported it to South Korea. Since most of the copper processing equipment is non-standard equipment, production is mainly determined based on market demand. Currently, the company's on-hand orders are sufficient to guarantee the steady growth of the company's copper processing equipment. We expect the company's copper processing equipment revenue to grow 10%, 20%, and 20% in '09, '10, and '11, respectively. Based on the above analysis, we expect the company's earnings per share for 2009-2011 to be 0.47, 0.63, and 0.85 yuan, respectively, with corresponding dynamic price-earnings ratios of 50, 37.30, and 27.65 times. Considering the company's expectations for a rapid increase in production capacity and the company's growth, we gave the company a recommended rating.