From January to June 2010, the company achieved operating income of 134 million yuan, an increase of 40.87% over the same period last year; operating profit of 1.1604 million yuan, compared with a loss of 3.2396 million yuan in the same period last year, turning losses into profits; net profit belonging to the owner of the parent company was 606600 yuan, down 31.82% from the same period last year; diluted earnings per share was 0.003 yuan.

The company's sales revenue to achieve a large increase is mainly conducive to the rapid growth of motorcycles and special vehicle products. The company actively implemented product structure adjustment in the first half of the year, accelerated the development of new tractors, big wheels, ATV700, 8 horsepower wind fire extinguishers, fire pumps, etc., and won the rapid growth in special vehicle products by constantly introducing marketable new products. In the first half of 2010, the company's sales of motorcycles and special vehicles increased by 55.43%, higher than the average growth rate of 40.87%.

The recovery in overseas markets is slow, and the domestic market is the main driver of growth. The domestic market grew by 52.23% in the first half of the year, of which the East China market grew by 74.24%, while the international market grew by 23.84%. Under the impact of the international financial crisis, the company's international market sales once fell from more than 300 million before the crisis to 70 million yuan in 2009; the company's international market sales revenue in the first half of 2010 was 45.1201 million yuan. At present, although the company's exports have recovered to some extent, due to the fact that the world's major economies have not yet fully recovered, and the United States and other countries have taken trade protection measures for ATV and other products, increasing the difficulty of exporting ATV products, the recovery of the company's sales in overseas markets may be slow. The domestic market, especially the central and western markets, may become an important performance growth point for the company in the future.

The company's profitability recovered significantly, and the company's operating profit turned from loss to profit. The company's consolidated gross profit margin in the first half of 2010 was 7.88%, an increase of 2.28 percentage points over 2009. The gross profit margin of major products has increased. The gross profit margin of motorcycles and special vehicles is 7.43%, an increase of 1.3 percentage points compared with 2009. The gross profit margin of power and garden machinery is 9.14%, an increase of 2.2 percentage points compared with 2009. We believe that the recovery of gross profit margin is mainly due to the economies of scale brought about by the substantial growth in sales of the company, which makes the company more profitable. The rebound in gross profit margin has turned the company's operating profit from negative to positive.

It is predicted that the company's net profit belonging to the owner of the parent company will increase by 60.93% in 2010 compared with the same period last year. EPS0.04 yuan in 2011; the price-to-earnings ratio corresponding to the current price is 538 times and 210 times respectively, maintaining a "neutral" investment rating.

Risk hint: the risk of large fluctuations in raw material prices and the risk of developing the domestic market.