In the first half of 2011, the company achieved operating income of 175 million yuan, a year-on-year increase of 34.70%; operating profit of 38.34 million yuan, a year-on-year increase of 40.50%; net profit attributable to owners of the parent company of 33.17 million yuan, an increase of 35.02%; and fully diluted earnings per share of 0.32 yuan/share. The main products are growing rapidly. The company's main products, universal couplings and drum-shaped gear couplings, increased by 34.10% and 44.51%. Since Ruici Transmission was incorporated into the company's financial statements in the second half of the year, it is expected that the company's main business revenue will continue to grow rapidly throughout the year. Horizontal mergers and acquisitions of peers will increase performance and strengthen the market position of the main business. During the reporting period, the company used overraised capital of 78.34 million yuan to acquire 79.34% of Ruici Transmission's shares. The acquisition is a horizontal merger and acquisition between peers. Through the acquisition, the company will further increase its market share and reduce the intensity of competition among peers to a certain extent. At the same time, the acquisition will also increase its performance in 2011. Intervening in the field of machine tools has the benefit of improving equipment levels and diversifying business. In January 2011, the company spent more than 24 million yuan to acquire Shaoxing KONE Machine Tools, which is engaged in the manufacture of high-precision, high-complex heavy-duty CNC machine tools; in May 2011, the company plans to invest 60 million yuan (30% of shares) to jointly invest in the establishment of Yizhong Group Ma'anshan Heavy CNC Machine Tool Co., Ltd., a joint venture to manufacture high-end heavy machine tools. The company's current equipment level is relatively poor and does not match its advanced technical level. By intervening in the machine tool field, it is possible to a certain extent to meet the company's requirements for the production of heavy-duty universal shafts and large couplings, improving the company's equipment level and enhancing the competitiveness of the company's existing business. Furthermore, by integrating external technology, channels and raw material resources, the company can quickly intervene in the machine tool field, which helps the company break through growth bottlenecks and improve the company's risk resistance and overall efficiency. Leading coupling enterprises in the metallurgical industry participate in the formulation of industry standards. The company participated in the drafting of industry standards for coupling-related 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. It is estimated that the EPS for 2011, 2012, and 2013 will be 0.75 yuan, 0.93 yuan, and 1.11 yuan respectively, and the price-earnings ratio corresponding to the latest closing price of 21.29 yuan will be 28 times, 23 times, and 19 times, respectively, maintaining a “neutral” investment rating. Risk warning: Investment in the steel industry has declined sharply.