In 2010, the company's operating income was 513 million yuan, down 17.6% from the same period last year; operating profit was 71.3 million yuan, down 27.2% from the same period last year; and the net profit belonging to the owner of the parent company was 91.75 million yuan, down 9.89% from the same period last year.

In the fourth quarter, the operating income was 152 million yuan, an increase of 50.3% over the previous quarter; the operating profit was 30.6 million yuan, an increase of 152.3% over the previous quarter; and the net profit belonging to the owner of the parent company was 43.2 million yuan, an increase of 327.5% over the previous quarter. Add 2.5 yuan (including tax) to 6 shares for every 10 shares.

The revenue of engineering radial tire manufacturing equipment decreased the most. The company mainly produces complete sets of equipment and testing equipment for load, engineering, passenger, aviation and other radial tires, while actively developing non-standard equipment in other industries, leading products with a market share of more than 50%. In 2010, the company's market share remained basically stable, and the number of orders increased significantly compared with the previous year. However, due to the long business cycle of the rubber and plastic machinery industry involved in the company, there is a certain lag in the growth of operating income, resulting in a 17.6% drop in operating income in 2010 compared with the same period last year. Among them, revenue from truck radial tire manufacturing equipment decreased by 15.52% compared with the same period last year, accounting for 57.11%; revenue from engineering radial tire manufacturing equipment and other equipment decreased by 22.56% and 19.57% respectively from the same period last year, accounting for 16.76% and 22.61% respectively.

Profitability has declined slightly. In 2010, the company's gross profit margin was 30.7%, down 0.4 percentage points from the same period last year. Among them, the gross profit margin of heavy radial tire manufacturing equipment was 29.94%, an increase of 0.18% over the same period last year; the gross profit margin of engineering radial tire manufacturing equipment was 18.56%, down 15.12% from the same period last year, mainly because the new type of giant engineering radial tire molding machine sold is trial-production equipment, and the cost still needs to be optimized. The gross profit margin of other equipment was 42.19%, up 12.01% from the same period last year, mainly due to the higher gross profit margin of A320 and A350 fixtures delivered to Airbus.

Take the radial tire equipment manufacturing business as the core, actively promote the aviation equipment manufacturing business. The company's radial tire equipment technology (engineering) center and industrialization project have currently completed 37.57%, and production is expected to reach production by the end of 2012, when the company's production capacity will increase from the current 62 sets to 171 sets, which will further expand market share. The company will be based on the rubber machinery industry, while taking into account the relevant diversified business development, actively promote aviation equipment manufacturing business, improve the income level of fixture business.

Profit forecast and rating. It is estimated that the EPS from 2011 to 2013 will be 0.84,0.92,1.16 yuan respectively. Based on the closing price of 28.57 yuan on April 8th, the corresponding dynamic PE will be 34 times, 31 times and 25 times respectively. Maintain a "neutral" rating, taking into account the company's relatively high valuation.

Risk hint. Downstream heavy truck, construction machinery industry demand decline and raw material prices higher than expected risk.