Incident: On August 10, Tianlong Optoelectronics disclosed its 2011 semi-annual report. The company achieved operating income of 417 million yuan in the first half of 2011, an increase of 124.73% over the same period of the previous year; operating profit of 103 million yuan, an increase of 166.54% over the same period of the previous year, and net profit attributable to shareholders of listed companies was 61.32 million yuan, an increase of 71.08% over the same period last year. Basic earnings per share were $0.31. Single crystal furnace sales continued to be strong, and James' hot field performance exceeded expectations. Since the industry's production expansion cycle lags behind the boom cycle, the company's shipments of monocrystalline growth furnaces remained relatively stable in the first half of the year, reaching more than 300 units. As the photovoltaic industry recovers in the second half of the year, the annual shipment volume is expected to reach 700 units. As the company's flagship product, the gross margin reached 40.5%, which is a significant increase over the previous year. Furthermore, the company's newly acquired company greatly exceeded expectations. The hot market company James, which holds 68% of the shares, originally planned to achieve a profit of 30 million for the whole year; it already achieved its annual target in the first half of the year, and the gross margin for crucible products of the holding company Jintan Light Source also remained high. We believe that the component integration that the company tried around the monocrystalline furnace product was very successful. The silicon wafer business fell slightly short of expectations and is expected to turn a loss into a profit in the second half of the year. Due to the serious drop in the price of photovoltaic products in the first half of the year, the performance of the company's nascent silicon wafer business fell short of expectations, and there were losses. As the industry warms up in the second half of the year, silicon costs were drastically reduced, and the silicon wafer business will gradually be fully produced, which is expected to turn losses into profits. New products have new developments. Polycrystalline furnace products have been shipped in small quantities, generating revenue of 20 million. On the LED side, the sapphire crystal growth process is being developed in cooperation with research institutes, which will help promote the future development of the company's business; MOCVD equipment will be prototyped in early 2012, and is expected to be the new favorite of successfully localized equipment. Give it a “Recommended” rating. We expect the company's EPS for 11-13 to be 0.82, 1.31, and 1.78 yuan, respectively. Since the company's various new businesses, such as polycrystal furnaces and sapphire furnaces, have basically completed technical reserves, it is actively developing customers and is expected to receive large orders. The company will enjoy high valuations and give it a “recommended” investment rating.