Matters: The company announced its 2011 annual report. In 2011, the company achieved operating income of 323 million yuan, an increase of 20.76%; operating profit of 106 million yuan, an increase of 11.28%; net profit attributable to shareholders of listed companies of 90 million yuan, an increase of 11.68% over the previous year; and basic earnings per share of 0.63 yuan. It is proposed to distribute a cash dividend of 6 yuan (tax included) for every 10 shares. The company also announced its results forecast for the first quarter of 2012. The net profit for the first quarter of 2012 is estimated to be 1478-16.26 million yuan, an increase of 0-10% over the previous year. Key Takeaways: Product sales are growing steadily. The company sold 1,6494 million power semiconductor device products throughout the year, up 35.88% year on year. The sales scale ranked among the highest in the domestic industry. Among them, 704,000 thyristors were sold, up 19.90% year on year; module sales were 621,000, up 8.21% year on year. Although the global economy decelerated in 2011 due to the European debt crisis, the company achieved a steady increase in sales. The rapid decline in gross profit led to loss of net profit. Due to the large increase in the prices of silicon wafers and copper, the main raw materials, and the increase in labor wages, the gross margin of the company's main business fell by 3.74 percentage points. Among them, the gross profit margin of the main product, thyristors, fell 4.67 percentage points, making the company's net profit growth rate lower than the revenue growth rate. Production capacity expansion is progressing in line with expectations. The company has completed a total of 60% of the investment in the fund-raising project and the No. 1 plant equipment has been fully upgraded. The high-standard No. 2 purification plant and the 6-inch wafer production line have been initially completed, and the company's overall production capacity has increased rapidly. The annual production capacity of power semiconductor devices has reached 1.8 million, which is in line with our original expectations. We anticipate that the company's fundraising project is likely to be completed as early as the end of 2012. New results have been achieved in product development and market development. The company made a breakthrough in the development of a full series of fully press-fit 6500V thyristors, and some models achieved mass production; 4000V fast thyristors were successfully developed, and products and technology remained leading in the country. The company's devices have made progress in entering the international high-end market. It has signed procurement framework agreements with two international industry brand companies, and mass supply of module products, chips, etc. has begun. Profit forecasting and valuation. With the gradual release of the company's fund-raising capacity and the global economy gradually emerging from the shadow of the European debt crisis, we expect the company to maintain a steady rise in performance in the next few years. The EPS for 2012-2014 was 0.74 yuan, 0.86 yuan, and 0.97 yuan, respectively. The current price corresponds to a price-earnings ratio of 21 times, 18 times, and 16 times, maintaining the purchase rating.