On June 30, 2012, the company, Jiangsu Xingyu, a subsidiary of the company, signed an environmental dredging agreement with the Yangtze River Wuhan Waterway Engineering Bureau (Yangtze River Wuhan Waterway, which belongs to the Jiang Navigation Administration, Minister of Communications of China) to provide dredging services for the South Lake at a price of 100 million yuan (RMB, same below), which is expected to be completed within 15 months. We believe this is a follow-up to the trial order placed in Q4 '11. The company negotiated with Wuhan Road in the Yangtze River in the first half of '12, and finally got an order. Although the amount may seem small, we think it is significant because 1) it shows its ability to pass government department standards, which shows its ability to pass government department standards, which shows its ability to pass government department standards, which shows its ability to pass government department standards, 2) environmental dredging gross margin, environmental dredging gross margin, environmental dredging gross margin, environmental dredging gross margin, environmental dredging gross margin, environmental dredging gross margin, environmental dredging gross margin, environmental dredging gross margin (> 50%), far higher than general dredging (38%). Furthermore, on May 17, the Development and Reform Commission announced that the<十二五重点流域水污染防治规划> total investment will be as high as 346 billion yuan, and environmental dredging will be an important part of it. We think the company will benefit accordingly. The company is currently trading at 4.4 times the expected price-earnings ratio for 12 years. Although it is expected that the net profit for the first half of '12 will be reduced in units compared to the first half of '11, the net profit for the full year of '12 should at least be the same as in '11. We believe that the 13th annual meeting is an important year for the company, because at that time, environmental dredging will begin to drive the company's growth. Maintain a “buy” rating and target price of HK$2.65, corresponding to 5.6 times the expected price-earnings ratio for 12 years.