Incident: On March 29, 2011, the company published its 2010 annual report. The full year of 2010 achieved operating income of 1,229 billion yuan, a year-on-year increase of 37.19%, total profit of 576.999 million yuan, a sharp increase of 1756.08% over the previous year, net profit attributable to shareholders of the parent company of 552,216 million yuan, an increase of 85.91% year on year, and the basic EPS was 0.06 yuan. Comment: The shipping business bottomed out and rebounded, and COA freight rates determined the overall price level to rise. The average freight rate for the 2010 COA contract increased by about 9% compared with the 2009 one, resulting in a unit freight rate of 52.35 yuan/ton. The company's shipping capacity increased by 110,000 DWT to 814,000 DWT in 10 years, up 16% year on year, and cargo throughput increased 20%. However, due to rising oil prices, gross margin dropped 4 percentage points to 22%. The company is expected to add 150,000 DWT capacity in 2011. Although international dry bulk freight prices will continue to be sluggish in 2011, coal transportation prices along China's coast are likely to continue to rise. Highways will continue to grow in the future. Highways have passed a three-year cultivation period. With the road network penetration effect showing, the company's traffic increased at an accelerated pace. In 2010, it was 5.85 million vehicles, an increase of 35.99% over the previous year. The average daily cross-sectional traffic was 1,674 vehicles, an increase of 72.68% over the previous year, and the average income of a bicycle was 39.82 yuan, an increase of 23.48% over the previous year. It is expected that the opening of the eastern section of the Ningbo City-Bypass Expressway in 2011 will result in a sharp increase in traffic compared to the western section. Give it a “Prudent Recommendation” rating. Since the international dry bulk freight price level may continue to be low in the future, we are cautiously optimistic that the freight rate will increase further. The company's profit growth point in the next two years will be mainly concentrated in the highway business. We expect the annual increase in traffic volume from 2011-2012 to be 0.1 and 0.15 yuan, which corresponds to PE of 50 times and 34 times, and the valuation is high. Considering that the company's future development will benefit from the “Zhejiang Marine Economic Development Demonstration Zone Plan”, we give it a “prudent recommendation” rating.