In 2010, the company achieved operating income of 282 million yuan, a year-on-year decrease of 9.88%; operating profit of 56.5 million yuan, a year-on-year decrease of 26.08%; net profit attributable to owners of the parent company was 50.5 million yuan, a year-on-year decrease of 20.03%; fully diluted earnings per share of 0.49 yuan/share; and the company's distribution plan was to distribute a cash dividend of 2.00 yuan (tax included) for every 10 shares. The company's performance fell short of expectations. The significant decline in gross margin in the fourth quarter was the main reason why the company's performance fell short of expectations. The gross margin for the fourth quarter was 32.10%, the gross margin for the first three quarters was 39.46%, and the fourth quarter was down 7.36 percentage points. As a result, net profit attributable to the parent company fell by 30.21% while sales revenue fell by only 11.68% in the fourth quarter. The gross margin of universal couplings and drum-shaped gear couplings, which account for more than 80% of the company's revenue, declined. Among them, the gross margin of universal couplings in 2010 was 36.69%, down 3.33 percentage points from the previous year, and the gross margin of drum-shaped gear couplings in 2010 was 37.66%, down 3.45 percentage points from the previous year. Investment in the metallurgical industry continues to be sluggish, and demand for the company's products is weak, leading to a decline in the company's ability to bargain with customers when obtaining orders, which is one of the main reasons for the decline in the company's gross margin; in addition, large fluctuations in steel prices have also made it more difficult for the company to control costs. Downstream demand is weak, and revenue from major products has declined. In 2010, universal couplings achieved revenue of 149 million yuan, a year-on-year decrease of 14.95%; drum-shaped gear couplings achieved revenue of 89 million yuan, a year-on-year decrease of 24.00%. The revenue of the cutting blade, which has a short usage cycle and high demand, increased 15.89% in 2010, showing strong resistance to cyclicality, but at present, this business accounts for only about 5% of revenue, which has little impact on the company's performance. In the future, the company is expected to become a leading enterprise in the field of cutting blades, thereby increasing the stability of its performance. Leading coupling enterprises in the metallurgical industry participate in the formulation of industry standards. In 2010, the company continued to maintain the highest production and sales volume in the metallurgical coupling industry in the country. In 2010, the company participated in the drafting of national standards for “large universal couplings” and “large hydraulic safety couplings” products, and also participated in the drafting of industry standards for “drum-shaped toothed shafts for finishing mills” products. Participating in the formulation of industry standards is conducive to further consolidating the company's leading position in the industry and brand recognition; it is conducive to further realizing the import replacement of the company's supporting couplings in the fields of medium and wide plates, hot-rolled plate and strip steel, and cold-rolled plate and strip steel. The EPS for 2011, 2012, and 2013 is expected to be 0.67 yuan, 0.77 yuan, and 0.89 yuan respectively, and the price-earnings ratio corresponding to the latest closing price of 26.28 yuan will be 39 times, 34 times, and 29 times, respectively, maintaining a “neutral” investment rating. Risk warning: Investment in the steel industry has declined sharply.