In the first quarter of 2010, the company achieved operating income of 63.41 million yuan, a year-on-year decrease of 20.14%; operating profit of 1.43 million yuan, a year-on-year increase of 4.38%; total profit of 1.44 million yuan, an increase of 5.11%; net profit attributable to owners of the parent company of 480,000 yuan, a year-on-year decrease of 50.53%; and basic earnings per share of 0.0018 yuan. Revenue from the steel structure business shrank, the pharmaceutical business continued to grow, and overall gross margin increased. During the reporting period, few projects under construction were completed by Huashen Steel, a subsidiary of the company. Operating income carried forward according to completion progress decreased by 36.77 million yuan, and operating costs decreased by 32.75 million yuan over the same period last year. Meanwhile, the operating income of the subsidiary Huashen Pharmaceutical increased by 1.92 million yuan year on year, and operating costs increased by 6.96 million yuan year on year. The profitability of the company's pharmaceutical business is strong, and the scale of pharmaceutical business revenue increased relatively during the reporting period. The company's overall gross margin reached 50.37%, an increase of 23 percentage points over the previous year. The cost of equity incentives is amortized, dragging down net profit. During the reporting period, since the company implemented an equity incentive plan, the cost incurred in 2010 was 2023 million yuan based on 35% of the equity incentive cost, which led to changes in the company's financial indicators: the company's long-term amortization expenses were 1,572 yuan, an increase of 15.11 million yuan over the previous year; the company's management expenses were 11.17 million yuan, an increase of 140% over the previous year, and the management expenses rate was 17.62%, up 11.76 percentage points from the previous year. Equity incentive costs of 5.06 million yuan have been amortized during the reporting period. Excluding the influence of this factor, the company's net profit attributable to owners of the parent company in the first quarter of 2010 was 5.54 million yuan, an increase of 4.7 times over the previous year. Future highlights. First, the marketing situation of lycatine. In 2010, the company will conduct a phase IV clinical trial for early interventional treatment of lycatine, and academic promotion will be carried out based on the trial results. Currently, interventional treatment of lycatine is mainly in the advanced stage of liver cancer. If early interventional treatment can be performed and good results are achieved, it will have an important effect on promoting the marketing of lycatine. Second, the resumption of steel structure business. We believe that the decline in steel structure revenue during the reporting period was phased. In recent years, the company's business has been generally stable, and the company's strategy in the steel structure business is relatively steady, so we believe that the overall situation of the company's steel structure in 2010 will increase somewhat compared to last year. Profit forecasts and investment ratings. Based on the total share capital of 269.88 million shares after the transfer, we expect the company's EPS for 2010-2012 to be 0.04 yuan, 0.05 yuan, and 0.09 yuan respectively. Based on the closing price of 9.68 yuan on the previous trading day, the corresponding dynamic price-earnings ratios are 242 times, 194, and 108 times, respectively. The company's current valuation is high, and we maintain the company's “neutral” investment rating for the time being. Risk warning. The marketing risk of ricatin; the risk of a decline in the company's gross margin due to a three-seven-year price increase; the risk of a decline in steel structure revenue.