In the first half of 2011, the company achieved operating income of 588 million yuan, an increase of 41.12% over the same period last year; operating profit of 23.78 million yuan, an increase of 78.96% over the same period last year; net profit belonging to the parent company was 59.09 million yuan, an increase of 497.94% over the same period last year; and earnings per share was 0.26 yuan.

During the reporting period, the company's operating profit increased by 78.96% compared with the same period last year. On the one hand, the main factor of the growth of operating profit is the increase of operating profit brought by the growth of operating income, on the other hand, it comes from the increase of investment income. During the reporting period, the company received 4.7556 million yuan in dividends from Xi'an Bank and 31500 yuan from Ningbo Bank, while there was no dividend income from Xi'an Bank in the same period last year.

The company's net profit increased by 497.94% in the first half of the year, mainly due to the total profit affected by the net income from the demolition of the site No. 226,232, Jiangbei District, Ningbo City, which affected the total profit of 55.6487 million yuan. Excluding this influence factor, the total real profit increased by 10.4574 million yuan over the same period last year, an increase of 76.8% over the same period last year.

Good cost control during the company period: in 2011, the company generated sales expenses of 18.32 million yuan, an increase of 3.23% over the same period last year, and the sales expense rate was 3.12%, a decrease of 1.14% over the same period last year. The management fee was 19.95 million yuan, an increase of 2.87% over the same period last year, and the management expense rate was 3.39%, a decrease of 1.26% over the same period last year. The financial expenses were 1.76 million yuan, an increase of 10.86% over the same period last year, and the financial expense rate was 0.3%, a decrease of 0.08% over the same period last year.

The increase in the proportion of gold operating income led to a decline in gross profit margin: the company's operating gross profit margin in the first half of the year was 10.56%, down 3.11 percentage points compared with 13.67% in the same period last year. The main influencing factor is that most of the growth in operating income of retail branches comes from wholesale and retail income of gold business in China. Due to the extremely low gross profit margin of gold sales in China, the company's overall gross profit margin has decreased. As a result, the company's operating profit margin has declined while operating income has increased.

The source of profit of the company is single: at present, the source of profit of the company is relatively single. Judging from the commercial operation in Ningbo, similar retail enterprises and shopping outlets are still gradually increasing, and the competition is becoming increasingly fierce; from the current situation of the operation of the company's retail stores, individual store operation is lack of competitive advantage, and the space for internal potential tapping and expansion is gradually becoming smaller, although the marketing efforts are still increasing year by year, but the space for profit growth is indeed gradually narrowing. For this reason, on the one hand, the company will continue to innovate marketing and innovative services, and strive to change to characteristic management; on the other hand, it will continue to look for opportunities for external development, establish brand effect and strengthen enterprise management to achieve the long-term and stable development goal of the enterprise.

Earnings forecast: the company is expected to earn 0.32 and 0.17 yuan per share from 2011 to 2012. Based on the closing price of 11.35 yuan on August 22, the corresponding dynamic price-to-earnings ratio is 38 times and 71 times, maintaining the company's "neutral" investment rating.

Risk hint: the company's profit source is relatively single, similar retail enterprises and shopping outlets are still gradually increasing, and the competition is becoming increasingly fierce.