Key points: In 2009, operating income increased 13% year on year, and net profit decreased 21% year on year. In 2009, the company achieved operating income of 976 million yuan, up 13% year on year; net profit attributable to shareholders of listed companies was 27 million yuan, up 13% year on year, and earnings per share of 0.066 yuan. The increase in the company's revenue was mainly due to a 24% year-on-year increase in ceramic tile sales, and the year-on-year decline in net profit was mainly due to the 8.3% year-on-year decrease in the average sales price of ceramic tiles, which caused the company's gross margin to drop by 5.02 percentage points to 29%. The sales volume of ceramic tiles is expected to grow by more than 50% year on year in 10 years. The company actively explored the market in 2009. In addition to the gradual completion and commissioning of 6 production lines and 1 pilot production line raised by the Jiangxi subsidiary, the production of ceramic tiles was increased by 3.84 million square meters, and the sales volume of ceramic tiles was increased by about 2.38 million square meters, resulting in a year-on-year increase of about 24% in tile sales in 2009. The production line raised by the company in 2010 is expected to reach full production. It is estimated that the production and sales volume of new ceramic tiles will be about 7 million square meters, an increase of more than 50% over 2009. The company's 10-year ceramic tile sales price will increase slightly by 3-5% compared to 2009. Affected by the financial crisis and fierce market competition, the company's average ceramic tile sales price in 2009 fell 8.3% year on year. However, starting in the second quarter of 2009, with the gradual recovery of the real estate market, the company's sales situation began to improve. Although it has not yet returned to the level before the financial crisis, the price of ceramic tiles is expected to continue to rise in 10 years, driven by the increase in real estate construction area. However, considering that the company will still expand sales volume at low prices in 10 years to seize market share, it is unlikely that prices will rise sharply in 10 years, and it is expected that there will be a slight increase of 3-5% compared to 2009. Costs are expected to remain relatively stable over 10 years, and gross margin is expected to rise slightly. In 2009, the company's raw material costs were basically the same as the previous year, with a slight decrease of 0.37% over the previous year; the price of natural gas fell slightly by 0.67%, and the price of electricity rose from 0.62 yuan to 0.64 yuan per kilowatt hour, an increase of 3.23%; the total cost was basically the same as in 2008. It is expected that both energy costs and raw material costs will remain stable in 10 years, and gross margin is expected to rise 3-4 percentage points due to a slight increase in prices. The 10-year performance improvement was significant, but the current valuation level is too high. Full production capacity in Jiangxi will be the main driving factor for the company's 10-year performance growth. The company's net profit growth rate in 10 years is expected to reach 70% and earnings per share are 0.11 yuan due to the sharp increase in ceramic tile sales volume and the rise in sales prices. The current stock price is 113.6 times that of PE. We are optimistic about the prospects for improving the company's 10-year performance, but considering the current high valuation level, we have given it a neutral rating.