Conclusions and suggestions: The company's 2011 revenue was 323 million yuan, YoY increased 21%; achieved net profit of 90 million yuan, YoY growth of 11.7%, and EPS of 0.63 yuan, in line with the performance report; the company's net profit growth rate was lower than that of revenue, mainly due to a 3.74 percentage point decline in overall gross margin to 38.4%. Looking ahead to 2012, the 1.25 million high-power semiconductor device upgrade and expansion projects raised by the company are expected to be completed by the end of the year, and the additional production capacity will provide support for the company's future performance growth. Although the company's products are mainly for industrial use, the growth rate of downstream demand will slow slowly against the backdrop of a slowdown in fixed asset investment, we believe that the company will fully benefit from the trend of shifting the high-power semiconductor device industry to China. Based on comprehensive considerations, the company is expected to achieve net profit of 108 million yuan and 132 million yuan in 2012-13, YoY increases by 20% and 22%, and EPS is 0.76 yuan and 0.93 yuan. Currently, corresponding PE is 20.3 times and 16.6 times, respectively. The company's stock price has been greatly adjusted, and there is a need for valuation correction in the short to medium term, and the dividend rate is close to 4%, which is raised to a “buy” investment proposal. 4Q11 operations grew steadily: the company's 4Q revenue was 84 million, YOY increased 7.3%, QoQ increased 0.44%; net profit was 22 million, YOY fell 12.8%, and QoQ increased 1.9%. The month-on-month increase in revenue and net profit in the 4Q quarter was better than the overall decline in the industry's 4Q economy, which also showed that the company was in a relatively steady state of business. Gross margin rebounded steadily: Affected by rising prices of copper, an important raw material, and rising labor costs, the company's overall gross margin fell 3.74 percentage points year on year to 38.4%; on a quarterly basis, the fourth quarter was 37.3%. Although it was down 8.6 percentage points year on year, it rebounded 0.1 percentage points month-on-month; the intensity of competition in the company's high-power device industry was far lower than that of consumer electronics, and the possibility that copper prices would continue to rise sharply in the future is low. Therefore, in 2012, the company's gross margin is expected to remain stable. Production capacity will continue to be released in 2012: in 2011, the company sold 1.65 million high-power devices, and YoY increased by 36%; by the end of 2011, the company's annual production capacity had increased to 1.8 million, and the technical improvement of 1.25 million high-power devices raised is expected to be completed ahead of schedule by the end of the year. At that time, the company's annual production capacity will increase to more than 2 million units, and the company's leading position in domestic segmentation will be further consolidated. The forecast for 1Q12 is 0%-10% growth: According to the company's historical data, the 1Q net profit ratio for the whole year is between 11%-16%, which is the traditional low season; although the 1Q profit growth rate is low, we believe that with the increase in the company's production capacity and the expansion of the share of high-end products in the future, the company's annual performance growth rate will increase. Profit forecast and investment advice: The company is expected to achieve net profit of 108 million yuan and 132 million yuan in 2012-13, YoY growth of 20% and 22%, and EPS of 0.76 yuan and 0.93 yuan. Currently, corresponding PE is 20.3 times and 16.6 times, respectively; it has been raised to a “buy” investment proposal.