Incident: The company issued an announcement on August 11. From January to June 2011, the company's total revenue, total profit, and net profit attributable to shareholders of listed companies were 554 million yuan, 55 million yuan, and 0.42 million yuan respectively, up 59.61%, 59.53% and 46.86% over the same period last year, with basic earnings per share of 0.44 yuan. At the same time, the company expects a 30%-50% increase in net profit attributable to shareholders of listed companies from January to September 2011. Significant increases in revenue and gross margin levels are the main reasons for the rapid increase in the company's mid-term performance in 2011. From January to June 2011, the company's revenue and net profit increased by 59.61% and 46.86%, respectively, which is significantly higher than the 2010 level (revenue: 35.53%; net profit: 3.55%). From January to June 2011, the company's gross margin increased by 5.42 percent. The accelerated construction of terminal channels and the increase in advertising expenses caused the period cost ratio to rise from 27.20% in 2010 to 31.96%, while the management fee rate and financial expense ratio decreased by 0.40 and 1.01 percentage points, respectively. The increase in product prices in 2011-2013 was less than in 2010. It is expected that the annual price increase will be 3%-5%, and the gross margin will remain at the level of 42%-45%. We believe that the main reason for the increase in gross margin in 2011 is that the price margin of the company's products was higher than the increase in cost. The main reasons for the increase in the price of the company's products are: 1. The main reasons for the increase in the price of the company's products are: 1. The pressure of rising costs in 2010 caused the price increase of the company's products by 10%-15%; second, the adjustment of the product structure (the company's vigorous promotion of high-end brands). As cotton prices fell from a high level to stabilized in 2011, the driving force of cost factors on price increases weakened, and it is expected that product price increases will decline in 2011-2013 and return to a normal rate of 3% to 5%. The multi-brand strategy has gradually been clarified, and the vigorous promotion of the company has significantly increased the proportion of the company's high-end products. Since the company began implementing a multi-brand strategy in 2000, in addition to extending Mengjie's main brand vertically, it has also promoted the construction of other brands horizontally: stepping up efforts to promote high-end brands, experimenting with online sales models, launching brand searches, and introducing normal aesthetics to meet the needs of middle- and low-income people. From January to June 2011, Mei brand's revenue growth rate was 110.66%, which is significantly higher than the Mengjie brand's level of 45.34%. Mengjie Home Textiles' dependence on the single market has weakened, and the horizontal expansion of the region has accelerated. As the leading home textile leader in central China, although the company has many channels in the central China region, where it has the greatest strength, and has an absolute competitive advantage, due to its slow peripheral expansion rate, Mengjie Home Textiles's market share has gradually been overtaken by Rollei and Fuana, which have faster expansion capabilities. After listing in 2010, the company made channel construction the focus of development and accelerated the construction of empty areas. In mid-2011, the revenue growth rates of Southwest China (179.99%), Northwest China (77.79%), South China (156.25%), and Northeast China (78.62%) all surpassed that of Central China (51.62%). As a result, the revenue share of central China fell from 49.50% in 2010 to 48.79%. In the future, the pace of construction of the company's sales network will accelerate, and in 2011-2013, the company added about 1,000 new sales outlets. In 2006-2008, due to the serious shortage of the company's production capacity, the IPO was approved for a long time. The capital was mainly invested in expanding production, and the expansion of the sales network was insufficient. In 2010, the company was successfully listed on the SME board, raising capital to expand production capacity and the convenience of outsourcing processing. Since then, the company will focus its development on sales expansion. Therefore, channel expansion will still be the main driver of performance in the next three years, and the acceleration of the pace of sales network construction will significantly increase the revenue level for the next three years. Maintain profit forecasts and maintain that the purchasing rating company is in the process of expanding to surrounding markets with the central China region as the core. It will fully enjoy the performance growth brought about by channel expansion and improved single-store earnings. The potential for rapid growth in income levels of Chinese residents has also become a highlight of performance growth. Net profit for 2011-2013 is forecast to be 1.38, 1.92, and 238 million yuan, respectively, with growth rates of 50.12%, 38.89%, and 24.28%, respectively; EPS for 2011-2013 was 0.91, 1.27, and 1.57, respectively, with a reasonable price range of 40.95-42.54 yuan, maintaining the buying rating.