1. Overview of the incident We recently conducted field research on Minfa Aluminum and exchanged views with the company's management on current operations. The company's fund-raising project will reach production in the second half of next year, and performance will experience rapid growth. 2. Analysis and judgment that there is still a gap in aluminum profiles in the province, creating favorable conditions for the company's future development. The company's main product is aluminum profiles. It is a leading aluminum processing enterprise in the Haixi sector. It has a production capacity of 36,000 tons in 2010, and the current production capacity has increased to about 40,000 tons/year. Due to the limited transportation radius of aluminum, 52% of the company's customers come from Fujian Province, and 33% of customers come from foreign markets such as Southeast Asia, Europe and South America. The demand for aluminum profiles in Fujian Province is 200,000 tons/year, yet there are only two large aluminum profile enterprises in the province, with a total production capacity of about 80,000. In addition to some small aluminum profile factories, there is still a gap of tens of thousands tons in the province. The increase in production capacity by about 40,000 tons in the company's fund-raising projects has no digestion problems. Aluminum profiles are affected by real estate. It is expected that the second half of the year will enter the peak consumption season and remain stable throughout the year. Currently, orders for aluminum construction profiles are slowing down, but the company is still in the full production stage. The slowdown in orders is mainly affected by last year's real estate regulation policy, and the reduction in new construction area has led to poor demand for aluminum profiles after the handover of new homes this year. However, the increase in affordable housing last year may make up for some of the demand for aluminum profiles. The second half of the year is generally the peak season for consumption of aluminum profiles. It is expected that the company's consumption of aluminum profiles will remain stable and operate at full capacity throughout the year. Processing costs are relatively stable. Since the aluminum profile industry is an industry with low industry concentration in the future, processing costs for ordinary building profiles are relatively stable. The company's aluminum profiles are relatively high-end products, and the product processing costs are slightly higher than those of its peers. Depending on the processing process and the length of the process, the processing costs range from a few thousand to tens of thousands of yuan. Industrial profiles are mainly white wood with a short process, and the processing cost is relatively stable at around 5,000 yuan; in the future, deep-processed products will also be the company's key development products, with a gross profit of about 20%. The products include bathroom, solar panel frames, LED light frames, computer cases, car luggage rack frames, etc., and are also part of the 40,000 ton profile for the fund-raising project. Currently, the company's overall gross profit still has room to improve in the future. Fund-raising projects were concentrated in the second half of next year, and performance ushered in rapid growth. After going public last year, the company replaced more than 40 million yuan, increasing production capacity by about 3-4 thousand tons, increasing production capacity by about 3-4 thousand tons, and limited production capacity added in 2012. The construction period of the project is 1 year, and equipment has been put in place one after another in the second half of this year. Production is expected to be reached one after another next year, and production capacity will be released centrally in the second half of '13. Production is expected to be 33,000 tons, 50,000 tons, and 56,000 tons from 2012 to 2014, respectively. 3. Profit Forecast and Investment Suggestions Minfa Aluminum is a leading aluminum profile processing enterprise in Fujian Province. Fund-raising projects will be concentrated in the second half of next year, and performance will explode. Since the company's fund-raising project is still in the equipment installation and commissioning stage, the increase in aluminum profile production this year was limited, and the company was given a “careful recommendation” rating. The 2012-2014 EPS is expected to be 0.41, 0.67, and 0.82 yuan respectively, corresponding to the current stock price PE of 32, 19, and 16 times. 4. Risks suggest that the new housing operation rate is declining; fund-raising projects have failed to achieve production as scheduled.