From January to September 2011, the company realized operating income of 154 million yuan, up 14.35% from the same period last year; operating profit of 17.97 million yuan, down 31.57% from the same period last year; net profit belonging to the parent company was 18.5 million yuan, down 16.97% from the same period last year; and diluted earnings per share was 0.20 yuan.

The growth rate of single-quarter results in the third quarter was faster than that of the same period last year. Judging from the single-quarter results, the company achieved operating income of 47.77 million yuan in the third quarter, an increase of 43.32% over the same period last year, a total profit of 8.89 million yuan, an increase of 20.62% over the same period last year, and a net profit of 7.63 million yuan for shareholders of listed companies, an increase of 17.69% over the same period last year.

There is little doubt that full-year profits are down from a year earlier. In the first three quarters, although the company's operating income increased by 14.35% compared with the same period last year, the company's operating profit and net profit belonging to the parent company decreased sharply compared with the same period last year due to the sharp decline in gross profit margin and the rise in fees during the period. Restricted by capacity bottlenecks, the company's fourth-quarter operating income year-on-year performance is difficult to exceed expectations, year-on-year performance decline is almost a foregone conclusion.

Expansion projects are progressing smoothly, and the company may usher in a period of rapid growth in the year after tomorrow and the year after next. During the reporting period, the company's investment project "heavy pressure vessel (including nuclear grade) manufacturing base construction project" progressed smoothly, and the theme project has been completed and is expected to be officially put into use in early 2012; the heavy pressure vessel manufacturing base construction project of the company's holding subsidiary Xinjiang Kexin heavy equipment Co., Ltd. is also on schedule and is expected to be completed and put into production in June 2012. As the production expansion projects enter the production period one by one, the company's performance has the possibility of explosive growth, and 12 or 13 years will become a period of rapid expansion of the company's business scale.

Successfully obtained the "Civil Nuclear Safety Machinery and equipment Manufacturing license". On September 21, 2011, the State Nuclear Safety Administration approved that the company had the relevant requirements and capabilities and granted the company the "Civil Nuclear Safety Machinery and equipment Manufacturing license". The acquisition of this certificate indicates that the company has the qualification to enter the manufacturing field of grade 2 and 3 pressure vessels in the nuclear island, which is helpful for the company to realize market transformation and product structure upgrading, and become a highlight of the company's future development.

Profit forecast and investment rating: we expect the company's EPS from 2011 to 2013 to be 0.28,0.40,0.53 yuan respectively. Calculated according to the closing price of 19 yuan on October 17, the corresponding dynamic PE is 68 times, 48 times and 36 times respectively, maintaining the company's "neutral" investment rating.

Risk tips: 1) the risk of rising raw materials; 2) the risk of a decline in fixed asset investment; and 3) the new production capacity of fund-raising projects can not be digested by the market.