The company's performance is in line with our expectations. We have previously pointed out that the PET bottle packaging industry will recover in 2006, and the company's profit is at the bottom of an imminent recovery. The year-on-year decline in main business revenue was due to the company's increase in the proportion of incoming material processing in the first half of the year. In fact, the company's PET bottle and beverage filling business both grew steadily. Revenue from the beverage replacement canning business increased sharply by 38.4%. Due to economies of scale, gross profit increased sharply by 78.4% to 9.65 million yuan, yet it still accounted for only 3.7% of the company's overall gross profit. Revenue from the beverage packaging business (after internal offsets) declined 16.5% year over year, but gross profit increased 16.3% year over year to 240 million yuan. From this, we roughly judge that the company's PET bottle sales in the first half of the year increased by about 15%, and the incoming material processing business accounted for about 1/5 of the company's total business volume. The gross margin of the company's PET bottles increased 2.57 percentage points year-on-year to 15.87%, mainly because some raw materials were reserved at the beginning of the year, and the incoming material processing business also transferred the risk of fluctuations in raw material prices to customers. The company's depreciation expenses (excluding depreciation of office equipment) increased from 117 million yuan in the same period last year to 128 million yuan, while the company's overall business volume increased by about 15%. From this, we can estimate that the capacity utilization rate in the first half of the year increased by about 5%. Increased capacity utilization has contributed to the company's profit growth. The company's performance has broken out of its trough, in line with our earlier judgment that “the PET bottle packaging industry is about to recover”. Maintain the previous forecasts of 0.20 yuan EPS for 2006 and 0.27 yuan EPS for 2007. Currently, the dynamic price-earnings ratio is only 13 times, and the net market ratio is 0.94 times. Maintain a “Highly Recommended” rating.