Main points of investment:

In the first quarter of 2011, the company achieved operating income of 673 million yuan, an increase of 20.36% over the same period last year, and a net profit of 22.121 million yuan, down 33.07% from the same period last year.

The company expects net profit to fall by 538% in the first half of this year compared with the same period last year.

As the impact of the increase in the price of raw materials is difficult to digest in a short period of time, coupled with the fact that the company's new device is in the early stages of achievement, the company's performance has declined.

However, in the long run, the increase in investment in oil exploration and development will help to improve the company's performance, and the company's long-term development trend can still be optimistic.

Based on the fact that the company's performance in the first half of the year was much lower than expected, the company's performance forecasts for 2011 and 2012 were lowered to 0.70 yuan and 0.80 yuan respectively. Downgrade the investment rating on the company's shares to "neutral".