Operating data for the current period: during the reporting period, the company achieved operating income of 1.225 billion yuan, an increase of 32.05% over the same period last year, an operating profit of 120 million yuan, an increase of 77.26% over the same period last year, and a net profit of 94 million yuan belonging to the parent company, an increase of 52.04% over the same period last year, and basic earnings per share was 0.21 yuan. The company's profit distribution plan for 2010 is based on the total share capital at the end of 2010, with a cash dividend of 0.5 yuan (including tax) for every 10 shares.

Overview of fundamentals: the company has changed from an original commercial and trading enterprise to a financial services enterprise such as pawn, guarantee and financial leasing, and has become the first listed pawn company in China. The company revolves around the development strategy of "quasi-finance as the leader, commerce and real estate as the two wings". Its holding subsidiaries are mainly engaged in domestic trade Xiangyi Jinlian (70% shareholding), Yuantai pawn (82%) and Xiangyi banner pawn (78.7%), etc.

Commodity sales income is the main source of business income: the company's domestic trade scale increased in 2010, and the company achieved commodity sales income of 967 million yuan, an increase of 33.12% over the same period last year. Commodity sales income accounts for 79.86% of the main business income and 78.94% of the total business income. The growth of business income is mainly due to the growth of commodity sales income.

The development trend of pawn business is good: in 2010, the company's pawn business showed restorative growth, the total volume of pawn business significantly expanded, and the ability of risk management was further improved. During the reporting period, the company realized 72 million yuan in interest income from pledged loans, an increase of 16.13% over the end of 2009. At the end of the reporting period, loans and advances issued by the company totaled 1.067 billion yuan, an increase of 58.17% over the same period last year, including 933 million yuan in normal loans, accounting for 87.46%, an increase of 13.13% over the end of 2009. At the same time, suspicious loans were 127 million, a decrease of 26.08% compared with the end of 2009, and the proportion of suspicious loans decreased to 11.92% from 25.51% at the end of 2009. The loss of asset impairment in 2010 was 2.6168 million yuan, a decrease of 92.3% compared with the end of 2009. The future economic recovery promotes a large number of enterprises' demand for capital, and the bank loan policy has been gradually tightened since 2010, coupled with the rise in interest rates to improve the company's loan yield, the company's future pawn business performance is expected.

Earnings forecast and rating: we predict that the company's earnings per share in 2011 and 2012 will be 0.33 yuan and 0.50 yuan respectively, and the dynamic price-to-earnings ratio based on the closing price of 11.77 yuan on March 28 will be 35 times and 24 times respectively. Under the background of tight bank loans, the company's capital demand is large, so the company's pawnbroking business has a broad space for development, coupled with the improvement of the company's loan yield, the company's future performance will be greatly improved. Upgrade the investment rating to "overweight".