From January to September 2009, the company achieved operating income of 210 million yuan, down 3.07% from the same period last year; the net profit belonging to the owner of the parent company was-5.66 million yuan, compared with-11.32 million yuan in the same period last year. The revenue in the third quarter was 887.3 billion yuan, down 1.51% from the same period last year. The net profit attributed to the owner of the parent company was-2.22 million yuan, compared with-4.75 million yuan in the same period last year. From January to September, the basic earnings per share will be-0.03 yuan.

The comprehensive gross profit margin fell in the third quarter compared with the same period last year and month-on-month. The comprehensive gross profit margin from January to September was 13.74%, down 0.63 percentage points from the same period last year. The comprehensive gross profit margin in the third quarter was 9.54%, down 6.27% from the same period last year, and 3.85% lower than that in the second quarter, mainly due to the increase in the cost of software sales due to the development and promotion of new projects. However, the increase in equipment procurement business of China Post Group from January to June increased the company's sales of envelopes and postage printers, and we speculated that the purchase volume of postal business from July to December dropped somewhat. As a result, the growth of gross profit margin in this part of the business slows down.

The rate of expenses during the period is higher than that of the same period last year. From January to September, the management expense rate was 8.31%, up 0.87% from the same period last year; the financial expense rate was 5.52%, up 1.13% from the same period last year, mainly due to the loan due during the reporting period and the increase in interest expenditure; the sales expense rate was 3.10%, up 0.08% from the same period last year. In the third quarter, the sales expense rate decreased by 2.35% compared with the same period last year. Our analysis is mainly due to the fact that the hospitality expenses and travel expenses of the original manufacturing department were recognized as sales expenses from January to June according to the requirements of rectification, and this part of the expenses have been confirmed to be completed from July to September, resulting in a decline in the sales expense rate in the third quarter.

The advantages of marketing channels are weakened, and the growth space of postal logistics and express delivery business is limited. As the post is a defensive industry, the company's business income in the postal system is still growing slowly, but the development space of postal parcels and mail business is very limited. With the promotion of the Internet and postal informatization, seizing the electronic postal logistics market is the driving force for performance growth. We believe that the postal group's demand for postage machines is uncertain, and the revision of the new postal law has intensified the competition between postal system integration and software business.

The major contracts disclosed during the reporting period are all contracts for the network construction of postal management information systems, which highlights the importance of the transformation of the company's business model. In addition, due to the lack of social resources and risk control, the expansion of government, education and other industries is obviously weak, the volume of business is reduced, and the current proportion of income is only 5.63%. It is increasingly urgent to develop new product marketing models and business relationships.

We expect the company's EPS from 2009 to 2010 to be-0.03 yuan and 0.02 yuan respectively. According to the closing price of 11.31 yuan on October 26th, the 2010 dynamic price-to-earnings ratio is 491times. The current valuation is on the high side and the company is given a "neutral" investment rating.