The company's third-quarter results were higher than market expectations. The growth rates of the company's operating income and net profit in the first three quarters were 17.97% and 56.80%, respectively. The reason for the rapid growth in net profit was mainly due to a 3.4 percentage point increase in product gross margin over the same period last year. Wind power gearboxes are an important growth point in the future. Wind power gearboxes are a key development product of the company recently. The company signed a large order of 390 million yuan in November 2010, which will guarantee the growth of next year's performance. The short term is constrained by production capacity bottlenecks, so increasing the sales share of high-end products is the direction of development. ⑴ In the short term, due to production capacity bottlenecks, the company expects annual revenue to maintain a growth rate of 10%-20%. ⑵ The company's two main businesses, marine gearboxes and power systems, and construction machinery transmissions, account for more than 70% of total sales, and are expected to maintain a steady growth trend. Automobile transmissions are still in the early stages of growth until new product development breakthroughs are made; ⑶ The company's new products are positioned at the high-end, and fund-raising projects such as adjustable marine propellers, electrohydraulic transmissions for construction machinery, and 2 MW wind power gearboxes are in line with the development trend of downstream industry upgrading and import substitution, and will help improve the company's profitability. The construction progress of fund-raising projects will accelerate. The fund-raising project was originally scheduled to be put into operation at the end of 2012. Due to strong market demand, the company will speed up construction progress, and is expected to start production 0.5 to 1 year ahead of schedule. Profit forecast and valuation: We expect earnings per share for 2010, 2011, and 2012 to be 0.32 yuan, 0.40 yuan, and 0.53 yuan respectively. The PE corresponding to the 16.08 yuan stock price is 51 times, 40 times, and 31 times, respectively. The valuation is fast and high in the mechanical parts board. Considering that the company's new products such as wind power have many growth points, we give it a “careful recommendation” rating.