Conclusions:

The company's traditional ceramic tile business is in a transition period. At present, domestic ceramic enterprises have reached more than 4,000, the number of ceramic brands has exceeded 6,000, and market competition is fierce. In 2011, the company further enhanced high-end brand awareness and penetrated from the high-end to the mid-range. The company completed internal organizational changes in 2010, and the results will begin to be seen in 2011. It is estimated that the sales revenue of ceramic tiles, the main business, will increase by about 30% in 2011. The company's lithium battery business is still in the initial planning stage, and progress is fast, but there will be no large-scale production in 2011, and there will be no big impact on performance. In terms of lithium mining business, economic benefits will be reflected as soon as 2012. Therefore, it is estimated that the company's EPS from 2011 to 2013 will be 0.12, 0.17, and 0.27 yuan respectively, and the corresponding P/E will be 118, 80, and 51 times, which is overvalued. However, from the perspective of lithium porcelain ore resources, the corresponding value of 60 million tons of minerals is 19 billion yuan, assuming that the company extracts 10 million tons of limonite and sells the rest as tailings, based on the conservative prices of 1,000 yuan/ton of litemica and 180 yuan/ton of tailings. Assuming a net profit margin of 25%, it corresponds to 4.75 billion yuan. The company's current market capitalization is 5.79 billion yuan. Excluding the lithium porcelain ore portion, the market value of the traditional business is 1.04 billion yuan. The valuation of the corresponding ceramic tile business is 2.5 yuan. The corresponding three-year P/E is 21 times, 14 times and 9 times, respectively. The valuation is underestimated. Considering the value of mineral resources and corresponding to the 25-fold P/E of traditional business in 2011, we gave the company a six-month target market value of 7.5 billion yuan, a corresponding target price of 17.9 yuan, an increase of about 30% from the current price, and gave a recommended investment rating.