In the third quarter of 2011, the company achieved operating income of 195 million yuan, a year-on-year increase of 13.23%; operating profit of 369.361 million yuan, a year-on-year decrease of 6.5%; net profit attributable to owners of the parent company of 33.512,900 yuan, a year-on-year decrease of 6.67%; and basic earnings per share of 0.50 yuan/share. There was a decline in single-quarter results, and cash flow was tight. In the third quarter, the company's revenue and net profit attributable to shareholders declined by 4.87% and 25.14%, respectively. At the same time, cash flow declined 611.75% year over year in the first three quarters to 49.04 million yuan. Changes in management are associated with a decline in macroeconomic patterns. Changes in business are related to the decline in macroeconomic forms. The company's main customers are mainly distributed in the electricity, steel, cement and other industries. Currently, capital is generally tight, which has led to a slowdown in the company's payment recovery rate. The company is engaged in industries related to “emerging industries,” “energy saving and emission reduction,” “circular economy,” and “remanufacturing.” By preventing wear and corrosion of equipment, equipment life is improved, and enterprise shutdowns or safety losses are reduced. Industry highlights. The anti-wear and anti-corrosion industry is a domestic Chaoyang industry. China's annual light wear loss accounts for 5% of GDP (2006 data), which is too high compared to Japan's 1% (1997 data) and America's 2.76%, and material losses are huge. Domestic steel and thermal power companies have poor wear and corrosion resistant materials for equipment (asbestos tiles or bricks). Steel and thermal power companies use new materials as low as 35%, and there is a lot of space. Industry space. Currently, demand for thermal power steel cement is growing rapidly. In 2010, the installed capacity of thermal power plants was 686,000 kW, and the theoretical protection area requirement was 2.85 million square meters. Based on 35%, there is 5-10 times more room. The steel industry's demand is 720,000 square meters. Overall, protection demand is growing at an annual rate of more than 20%, reaching 3.1 million square meters by 2013. Furthermore, dry cement technology and forced desulfurization devices (increased wear and tear) encouraged by industrial development policies introduced by the country will increase demand for wear prevention. Company highlights. The core focus is on materials and technology. The materials cover six major material series, with a complete range of products to meet the needs of different levels; advanced materials and technical services, the self-developed KM material is the international leader, and the only one in China that can achieve supersonic flame online spraying. Other highlights include that customers are mainly large power generation groups and steel groups, and customers are stable; at the same time, the company has set up a national service platform to provide fast service. For the first time, an “gain” rating was given. The company's EPS for 2011 and 2012 is expected to be 0.80 yuan and 1.05 yuan. Based on yesterday's closing price of 23.26 yuan, the corresponding price-earnings ratio is 25 times and 19 times, maintaining the “gain” rating. Risk warning: The ratio of accounts receivable is too high, creating a risk of bad debts.