The construction machinery industry has grown by over 70% in the year

China Machinery Industry Federation learned that the machinery industry in September before the rapid growth in production and sales. Among its 12 subdivided industries, construction machinery has achieved the fastest growth. Among the many products of construction machinery, the excavator's production and sales are the best.

According to interviews with this newspaper, industry insiders said that the excavators will continue to maintain the upward trend of related company stocks in the fourth quarter, which is expected to increase by more than 70% in the whole year.

January-September excavator most "hot"

According to data from the Federation, from January to September, the total industrial output value of the machinery industry totaled 102,531.12 billion yuan, a year-on-year increase of 34.59%, and the growth rate was 23.6 percentage points higher than the same period of last year.

The 12 sub-sectors in the machinery industry all showed a growth trend. There were 5 growth rates over 35% compared with the same period of last year. The order was: construction machinery, machine tool, automobile, mechanical basic parts and internal combustion engine industry, including construction machinery. The industry's production grew fastest, with a year-on-year increase of 50.88% from January to September. "This year, the production and sales of construction machinery is the best in history," said the Federation's sources.

The reporter also learned from the Construction Machinery Industry Association that excavators are the most "hot" products in the construction machinery industry. From January to September, total excavator sales increased by 83.4% year-on-year.

According to the introduction, the high growth of excavator sales is mainly driven by domestic demand. From January to September, excavator exports have been stable, but domestic sales exceeded 124.1 thousand units, a substantial increase of 83.7% year-on-year.

The regional revitalization strategy will also provide a strong impetus for the domestic market. Therefore, Gao Xiaochun, a research fellow of CITIC Engineering, predicts that excavator sales in October will continue to maintain an upward trend from the previous quarter; the total sales volume for the whole year is expected to reach 165,000 units, an increase of 73.7% year-on-year.

At present, the major excavator manufacturers in China include Changlin, Liugong, Sany, and Sunward.

Annual increase in export earnings will reach 15%

The reporter learned that the “12th Five-Year Plan” of the engineering machinery industry being formulated has listed the improvement of market concentration as an important goal. After five years, the sales scale of top 100 engineering machinery enterprises must reach 85% or more of the entire industry, and efforts must be made. It will train large-scale enterprises with strong competitiveness and innovation ability into aircraft carrier-type international famous companies.

However, Federation officials said that international trade protectionism has expanded, and exports in the fourth quarter cannot be overly optimistic. However, due to the low base last year, the total amount of foreign exchange earned through mechanical industry exports can still achieve about 15% growth.

Zoomlion: China enjoys a booming infrastructure economy in foreign countries. The first half of the year has seen both revenue and earnings growth exceed expectations. Affected by the 4 trillion infrastructure investment release, the company's first-half net income increased by 74.37% year-on-year to 16.088 billion yuan, while net profit increased by 93.88% year-on-year to 2.202 billion yuan. Net profit grew faster than revenue growth, which was related to a 3.13 percentage point improvement in gross margin. The increase in gross profit margin is reflected in the strong demand in the first half of the year and the lower cost of steel.

The performance of concrete machinery in the first half of the year is excellent, and it is expected that it will be in the normal trend of “high before and after low” throughout the year. From a product perspective, concrete machinery increased by 99.12% to 7.036 billion yuan in the first half of the year; hoisting machinery increased by 61.34% to 5.909 billion yuan; other machinery increased by 54.93% to 3.145 billion yuan. The high growth rate of concrete machinery was in the second and third tier cities and the west of the east. As a result of the use of commercial concrete in the region, the first half of the hoisting machinery was mainly based on individual demand for small tonnage of 20-25 tons. Looking forward to the second half of the year, the third quarter is the traditional off-season. In addition, the risk of the secondary bottom of the foreign economy has increased, causing the market to worry about a sharp fall in the second half of the year. We believe that the new construction of real estate is still at a high level. The demand for concrete machinery will not fall significantly in the second half of the year. With the technical transformation of large-scale projects, the demand for large-tonnage cranes will also rise. Therefore, the trend of “high before and after low” in normal years will be presented throughout the year.

The plan for revitalization in various regions is frequent and the company will continue to benefit from infrastructure construction in the next three years. Using 4 trillion investment to drive economic growth, during this period, the economic transformation should be the original intention of 4 trillion investment. Considering the increase in the risk of double bottoming in the foreign economy, we believe that new investment plans are not ruled out, such as plans for revitalization around the country. As a result, the company will continue to benefit from infrastructure development before 2012, in accordance with the construction cycle of the infrastructure project, which is usually around three years old.

With a low profile overseas, we will prepare for the steady growth in the future. The world's top 20 statistical construction machinery, domestic sales accounted for a total of 30-50% of the total sales, while domestic construction machinery accounted for about 80-90% of domestic revenue, so the layout of overseas markets is the growth of domestic engineering machinery companies The inevitable path. The Company's 2007-2009H1 overseas sales revenue accounted for 11.36%, 20.43%, 12.59% and 4.87%, respectively. It relied heavily on the domestic market and could not smooth the impact of domestic single market fluctuations. Therefore, the company intends to issue H shares with a low financing ratio for international distribution. We believe that if completed successfully, market diversification will greatly contribute to the company's steady growth in the future.

The valuation is still low, giving a "recommended" rating. We have calculated the valuation of Caterpillar, the leading international construction machinery company, from 1997 to 2008. As a result, PE fluctuates around 16 times and PS fluctuates around 1 time. We believe that similar PE valuations can withstand the long-term test of the market. The latest forecast for the company's 2010-2011 EPS was 1.79, 2.26 yuan, the current price of PE was 13.42, 10.59 times, according to 16 times the PE valuation of 28.64 yuan, giving a "recommended" rating. (Fortune Securities Wang Qun)

Longxi Co., Ltd.: The product entered the new energy industry. The buying performance of the military is slightly lower. Expected: In the first half of the year, the company realized operating income of 342 million yuan, an increase of 56.02% year-on-year; net profit attributable to the parent company was 43.69 million yuan, a year-on-year increase of 41.15%; and basic earnings per share were realized. 0.16 yuan, a year-on-year increase of 32.48%, slightly lower than our expectations.

The bearing business grew rapidly, and the gear and transmission business quickly recovered: thanks to the recovery of construction machinery and heavy-duty vehicles, as well as exports, the bearing business of the company showed a booming production and sales situation. During the reporting period, the company’s bearing business revenue was 252 million yuan, an increase of 46.44% year-on-year. With the development of new customers in the field of gears and transmissions, and the recovery of downstream demand, the revenue of gears and transmissions was 75.6 million yuan, an increase of 120.46% year-on-year.

The overall gross profit margin decreased slightly: In the first half of the year, the company's consolidated gross profit margin was 28.6%, a year-on-year decrease of 1.16 percentage points. The main reasons were: First, the increase in steel prices and labor costs, and the price reduction of some products of Yongan Bearing; and second, due to gears and variable speeds. The rapid recovery of the box business led to a 6% increase in revenue, but the low gross profit margin of these products resulted in a lower gross profit margin.

The special joint bearing project progressed smoothly: In 2009, the company decided to invest 236 million yuan in the construction of a special joint bearing project. As of the reporting period, the company had completed a total investment of 46.9 million yuan (including about 28.5 million yuan for the construction of infrastructure such as factory buildings. Construction of a three-storey factory building at the Lam Tin No.1 Plant Site and the construction of a new experimental center for the groundbreaking of the parent company's Yanan North Plant Site; in addition, approximately 18.4 million yuan will be invested in the acquisition of some production equipment, testing equipment and other auxiliary equipment). 20% of the investment, the project has generated 13.25 million yuan in profits during the reporting period.

Optimistic about the development prospects of special joint bearing projects: Special joint bearings are widely used in aerospace, new energy, rail transportation, steel roof structures, heavy-duty vehicles and other fields. In particular, with the continuous advancement of large-scale aircraft projects in China, related supporting products will gradually enter the supplier qualification stage. Since then, the company has had close exchanges with AVIC Group in terms of business. If the company can pass this supplier qualification certification. , will form a long-term good for the company's development.

Liugong: Earnings increase by a large margin and target price of 28 yuan Investment Highlights:

Interim Report Overview: The company's operating income, operating margins, and net profit for the medium-term period were 81.6, 19.0, and 920 million yuan, respectively, an increase of 64%, 86%, and 148% year-on-year; consolidated gross margin and net profit were 23.32% and 11.25%, respectively. , year-on-year increase of 2.78, 3.85 percentage points.

The medium-term EPS is 1.412 yuan.

The main reason for the significant increase in medium-term income: The sales of loaders, excavators, cranes, road rollers, and forklifts increased by 43%, 105%, 75%, 88%, and 125% year-on-year, driven by the domestic RMB 4 trillion follow-up. Revenue from construction machinery and accessories increased by 62% and 61% respectively year-on-year. Among them, the loader is limited by capacity, otherwise the growth rate should be faster.

The main reason for the increase in gross profit margin was the increase in sales volume and the low cost of steel. As a result, the gross profit margin of earth-rock machinery, which accounted for 79% of revenue, rose by 3.74 percentage points. However, Q2's gross profit margin in one quarter fell by 2.04 percentage points compared with Q1. It is expected that in the second half of the year, sales volume will decline month-on-month, steel prices will not change much, and the consolidated gross profit margin will be harder than in the first half of the year, but no major changes are expected.

The reason for the increase in net margin over gross profit and net profit was faster than that of income and gross profit: the period cost rate decreased by 1.76 percentage points, among which the sales expense rate, management fee rate and financial expense rate decreased by 0.5, 0.43, and 0.83 percentage points, respectively. The company's expenses are properly controlled.

Export resumed quickly: in the first half of the year, it exported 2,220 units to the level of 2,345 units in 2008, an increase of 39% year-on-year; export revenue increased by 65% ​​year-on-year, and revenue accounted for 7.83%, up 0.15 percentage points over the same period of last year. The growth rate of exports is obviously higher than the overall level of the industry.

Shenyang Machine Tool Industry: Rapid recovery of the industry and increase in holdings The semi-annual report of 2010 shows that from January to June, the company achieved operating revenue of 4.361 billion yuan, an increase of 78.49% year-on-year; operating profit of 53.07 million yuan, compared to a loss of 41.08 million yuan in the same period of last year; The net profit attributable to the parent company was RMB162 million, which was a loss of RMB49.94 million in the same period of last year; EPS was RMB0.31, and the ROE was 10.79%. After deducting non-recurring gains and losses, the net profit was 37.698 million yuan and the EPS was 0.07 yuan.

The rapid recovery of the industry, the company's operating income increased significantly. During the reporting period, the domestic and international machine tool industry market showed a recovery momentum. From January to June, the cumulative production of gold cutting machines in China increased by 25.7% year-on-year; the cumulative production of CNC machine tools increased by 50.8% year-on-year. Benefiting from the continuous recovery of the machine tool industry, the company's product sales grew rapidly, and CNC machine tools achieved sales revenue of 2.521 billion yuan, a year-on-year increase of 129%. Sales revenue from ordinary lathes, boring machines, and drilling machines increased by 53%, 22%, and 36% year-on-year respectively.

The product structure has been continuously optimized and the gross profit margin has been greatly improved. Starting in 2007, the company strongly promoted the adjustment of product structure and continuously increased the proportion of CNC machine tool products in its main revenue. During the reporting period, the sales revenue of CNC machine tools increased significantly, and the proportion of main business revenue increased to 58%. In 2009, the proportion of CNC machine tools was only 52%. The main comprehensive gross profit rate was 19.38%, an increase of 3.63 percentage points year-on-year.

The major reason for the substantial increase in gross profit margin is the continuous optimization of product structure. The gross profit margin of CNC machine tools is much higher than that of ordinary machine tool products.

The management level needs to be improved. During the reporting period, the company received a government subsidy of 137 million yuan, a substantial increase in non-operating income of 923.60%. After deducting non-recurring gains and losses, the return on net assets was only 2.57%, and the net profit margin was only 0.86%. The profitability needs to be improved.

During the company's period, the cost rate was as high as 17.56%, and at a relatively high level of about 17% all year round. The management fee rate has been around 8%. The company's profitability in the future will be improved. In addition to optimizing the product structure, it is also crucial to improve the management level.

Acquisition of group subsidiaries reduces related party transactions. On July 20th, the company acquired 80% of the shares of the company's subordinate company's complete set of equipment limited liability company through a listed transfer method. The company provides castings and forgings, machine tool accessories and complete machine products to the complete set of companies each year, resulting in large-scale connected transactions. Through this acquisition, it will help improve the company's production and operation chain, enhance the company's business independence, and reduce associated transactions.

Jinxi Axle: Recovery resumed during the second quarter of the year. The semi-annual report shows that the company’s main business income in the consolidated financial statements reached 860 million, an increase of 51% year-on-year, of which the recovery in the second quarter was even better, with the main business up nearly 100% year-on-year, and the main business performance was restored on time according to our annual report. judgment.

In the first half of the year, the Ministry of Railways invited 15,000 trucks, of which the company received orders for about 800 vehicles. At the same time, the company sold about 60,000 units in the first half of the year, and its market share continued to exceed 58%. The company’s demand for various products was in In a more stable recovery state.

Forging machine overhaul, Baotou company's transformation makes the company's axle gross profit decline. The semi-annual report showed that the company's product gross profit margin remained at a relatively low position of only 9%, which is far from the company’s consolidated gross profit of 14% in 2008. In terms of subdivisions, the company’s traditional profitable product axles and wheelbase saw the most severe drop in gross profit, with only 4% and 8% in the first half of the year. In the first half of the year, the precision forging machine of the company's headquarters was overhauled, and maintenance costs were all included in the cost; the transformation of the Baotou axle production base has not been completed, and the manufacturing cost is at a high level; at the same time, the phased price increase of steel in the second quarter was the main reason for the reduction in gross profit of the company. Since the second half of the year, with the overhaul of precision forging machines completed and the sharp reversal of steel prices, the gross profit margin of the company's headquarters axles will gradually rise. At the same time, the technological transformation of the Baotou axle production line will also be completed gradually (it is expected to reach full production in May next year), and manufacturing costs will gradually be reduced. The gross profit of the company's axle products under normal conditions should be able to maintain a relatively high level (the company's gross axle gross margin was around 20% in 2005-2008), and the lower gross profit level in the first half of the year will not last long.

The second half of the year will continue to grow. In July, the company received orders for 300 railway trains in the bidding for railway trucks of Inner Mongolia Kunde Logistics Co., Ltd., and the order price increased by 67,000 yuan compared with the orders of the Ministry of Railways in the first half of the year, which was a good start for the company's second half of the year. . At present, the growth of railway freight transportation remains at a relatively high position. We expect the Ministry of Railways will still have a relatively large amount of tenders in the second half of the tender, which is unlikely to be lower than in the first half of the year. At the same time, some off-road orders outside the Ministry of Railways will also likely increase in the second half of the year. Therefore, in a comprehensive view, the company's performance in the second half of the year will continue to resume growth.

Exports, high-speed railway axles, and castings and forgings are the main highlights of the company's future growth. In the first half of the year, the company's export business reached 150 million yuan, accounting for about 18% of the total, but still far away from the peak of export business. As the recovery period of railway logistics was later than that of macro economy, although the overseas economy increased in the first half of the year, the company Overseas order recovery is still relatively flat. We expect that with the further recovery of overseas economic growth, especially the rapid recovery of the traditional export destinations of companies such as India and Australia, the company’s export orders will gradually increase. In terms of high-speed axles, although the company already has some products exported to the European Union and is installed on Siemens high-speed rails with a speed of 200 kilometers per hour, the current products are still unable to meet the demand for domestic vehicles with an average speed of 300 kilometers per hour. The company has initiated in-depth and collaborative research with domestic special steel leader TISCO Stainless to improve the quality of the company's axles from both raw materials and machining. We believe that the axle of the motor vehicle is an important component of the motor vehicle, and the localization trend is clear. Leading companies with large precision forgings are more likely to obtain high-speed railway axle qualifications from the Ministry of Railways. At the same time, the company's subsidiary Baotou Northern Forging also has a good foundation in terms of small precision forgings. The products are highly used in Beiben heavy trucks and other civilian equipment. The promotion in other civilian products will further enhance the company's performance.

China First: Rapid growth in ultra-expected performance of nuclear power equipment Nuclear power equipment: Nuclear power construction will still exceed market expectations. The company has nuclear grade casting and forging core resources. Future company's nuclear energy equipment business will be realized from castings and forgings to complete sets of equipment, from domestic sales to exports, and from From three-step leapfrogging of complete sets of equipment to engineering general contracting, the company's nuclear power equipment business in 2015 will have a revenue scale of 12.8 billion;

Overseas markets: The company has already achieved considerable international competitiveness in traditional competitive products such as metallurgical complete sets of equipment and heavy pressure vessels, and will continue to benefit in the process of industrialization in emerging market countries in the future;

New products: Relying on strong research and development capabilities, the company has accumulated performance growth points in many fields such as seawater desalination equipment, large-scale solid waste treatment equipment, horizontal roller mills, roadheaders, marine engineering equipment, and new composite materials. It is expected that the EPS for 2010-2012 will be 0.20, 0.27 and 0.37, corresponding to PE25.9, 19.5 and 14.1 times. As a representative enterprise of domestic high-end equipment, the performance of the company is expected to enter a fast-rising new channel in 2011, giving a "recommendation". Rating. (Yangtze River Securities Liu Yuanrui)

Double reloading: new energy equipment tomorrow will be better research conclusions:

The sharp decline in metallurgical equipment revenue is the main reason for the lower-than-expected performance. Affected by the slowdown in fixed assets investment in China's steel industry, the company's metallurgical equipment revenue dropped sharply in the first half of the year, a year-on-year decrease of 54.6%. The decline in metallurgical equipment revenue dragged down the company's operating income growth. Due to the decrease in the prices of steel raw materials, the gross profit margin of the company's metallurgical equipment reached 22%, an increase of 9% year-on-year, which ensured the company's net profit growth.

Clean energy power generation equipment has benefited from the national strategy and achieved high growth. In the first half of the year, the company's clean energy power generation business realized sales revenue of 1.277 billion yuan, a year-on-year increase of 28.8%, and its gross profit margin remained basically unchanged at approximately 28% from the same period of last year. The development of strategic emerging industries such as new energy and the realization of a low-carbon economy and green GDP will be an important theme in China's "Twelfth Five-Year Plan". The company will have a leading edge in clean energy equipment such as nuclear power, hydropower, wind power, and super-large thermal power plants. . We believe that with strong technical strength and leading manufacturing capabilities, the company will fully benefit from the country's clean new energy strategy in the future.

Adjust product structure to achieve a major breakthrough in the field of new energy. After adjusting the product structure, the proportion of metallurgical equipment has dropped from 55.21% in 2006 to 42.75% in 2009, and the proportion of clean energy generating equipment has increased significantly to 31.74% in 2009. As of the end of the first half of 2010, the company had orders for 15.537 billion yuan, of which clean energy equipment and petrochemical containers accounted for 55%; new orders for the first half of the year were about 3.5 billion yuan, and clean energy and petrochemical containers accounted for more than 60%. Through the adjustment of product structure, the company has achieved a major breakthrough in the field of new energy. We expect the vigorous development of the new energy sector is the main driving force for the company to achieve high growth.

Risk factors and catalysts: The uncertainties in domestic and international macroeconomic and raw material price fluctuations, as well as the uncertainties in the macro-control effects of steel and related industries are the main risk factors facing the company. The introduction of relevant supportive policies for the development of strategic emerging industries, such as the development of new energy, is the main catalyst for the company’s share price. The rapid growth of nuclear power wind power and other clean energy power equipment is the company's main driver. We expect the company's net profit growth rate to be 66.59% in the next three years.

ZPMC: Solidify Foundation Positive Transformation Target Price 7.2 Yuan Investment Highlights:

Interim Report Overview: The company's operating income, operating margins, and net profit for the medium-term period were 89.85 and 341 million yuan, respectively, a year-on-year decrease of 41% and 82%; net profit attributable to owners of the parent company was 187 million yuan; consolidated gross profit margin and net profit margin They were 3.79% and -2.08%, respectively, down 8.27% and 7.91% respectively. The medium-term EPS is -0.043 yuan.

Reasons for the sharp decline in medium-term income: Due to the subsequent impact of the financial crisis, orders for traditional businesses were severely insufficient, resulting in 52%, 23%, and 54% year-on-year declines in container cranes, bulk cargo components, and steel structures respectively.

The reasons for the sharp decline in comprehensive gross profit margins are: (1) the impact of the crisis on the decline in the prices of traditional business orders; (2) the company is still digesting high-value steel stocks; (3) rapid depreciation of pre-fixed-asset investment, and rapid depreciation; (4) company consolidation Cost management. In the traditional business, the interim gross profit margin of container cranes and bulk cargo components fell by 12.08 and 6.23 percentage points respectively year-on-year.

Demand Outlook: Affected by the global economic recovery process, it is difficult for traditional businesses to rise back to the pre-crisis level in the short term. At present, the number of handheld orders is about 4 billion yuan, which is still insufficient compared to capacity. However, the new contract signed in the first half of the year was nearly US$1.5 billion, an increase of 170% year-on-year. The company has already reached the lowest point.

Profitability Outlook: This year's strict cost management is a solid foundation for the company. It is expected that as high-priced steel products are consumed in the third quarter, gross profit margin will gradually enter a recovery channel.

Product structure adjustment: The proportion of revenue from the mid-term marine industry rose to 25%, up 13% year-on-year. The details of the USD 2.2 billion offshore engineering contract of ADHK in Spain are still under negotiation and are expected to be delivered mainly in the next year.

Jia Hao, Shanghai: Looking for new growth points in the future. Private boat design enterprise leader. The company is the largest privately-owned ship design company in China and specializes in ship engineering design, marine engineering design and ship construction supervision. In terms of products, the company designs to develop in the direction of low-carbon and energy-saving. In the future, it will focus on yachts; in terms of services, the scope of services will be extended to the design engineering general contracting (EPC) business, assembly and installation, and emergency services after delivery; R&D will continue. Increase investment. Offshore and yachting business are two important growth poles of the company in the future.

2. Ship business has been expanded. Shipbuilding engineering operating revenue decreased by 17.68% year-on-year, mainly due to the delay effect of the ship design industry due to the 2008 financial crisis. With the increase in ship design orders and the warming of local markets in 2010, this trend has eased. Once the industry recovery trend is established, the company can quickly rebound in this sector. It is worth noting that the company’s EPC contracting project for the 147.6 million Shanghai Pilot Boat Design Project undertaken by the company further extends the company's technical service chain. This alone can confirm the company’s income of about 73.8 million yuan this and next year. EPC has a large business target and high net profit. It is expected that the company will continue to receive related business income in the future.

3. The offshore business has a bright future. The proportion of the company’s revenue from offshore operations continued to increase. As the policy is not yet clear, no explosive growth has occurred. With the successive introduction of relevant national policies, the offshore engineering business is expected to enter a rapid upward path. The company has already cooperated with the downstream offshore manufacturing companies in the offshore support ship, and will increase investment in R&D into the drilling platform in the future. The company's future offshore business growth is determined.

4. The yacht business is expected to bring about a qualitative improvement for the company in the future. The company plans to put into production a medium-sized yacht three years later, with an annual output value of about 108 million, and it is estimated that the gross profit rate can be as high as 50%. The company has few competitors in the yacht market and all of them are lacking the core competitiveness of ship design to produce glass companies. Given the company’s R&D capabilities and the huge market demand for yacht consumption, the yacht business in the future is expected to become an important growth point for profit.

5. It is expected that the company's EPS for 2010, 2011, 2012 and 2013 will be 0.69 yuan, 1.03 yuan, 1.52 yuan and 2.05 yuan. Combine the status of the current industry and the company's future growth, give overweight rating.

Juli rigging: high-end rigging market monopoly + a significant global strategy Ni rigging as the demand for industrial consumer goods is strong and stable, and the requirements for the design capabilities of high-end individualized hoisting programs differentiate it from traditional manufacturing, with a domestic market size of about 40 billion yuan. The average annual growth rate of 20% in the future. Rigs are used as industrial consumables in various fields such as manufacturing and shipping. Most of the use cycles are within one year, and the frequency of replacement is high. It is less affected by the cyclical fluctuation of the single industry. On the one hand, due to the influence of heavy industry, on the other hand, the standardization of industrial enterprises is the main reason to promote demand growth. It is estimated that the potential demand for the crude steel chain and chain rigging market is only 600,000 tons, and the company’s capacity is only 15,000 tons, and the future space is huge. The high-end rigging, especially the national key projects, require extremely high safety requirements. At the same time, the company needs strong support for designing the lifting scheme, which is different from the traditional manufacturing standardization products. It only provides steel wire or steel with Ningxia Hengli and Guisheng. Different rope and other materials products, the company positioning high-end and provide a full set of lifting program design, comprehensive gross margin of 37%, over 20 percentage points.

At present, the trial production of fund-raising capacity is on a smooth track. With the release of part of the production capacity in the second half of the year, the total production capacity has increased by 161% in 2012. The solution to the bottleneck of production capacity has helped the company's performance to enter a period of rapid growth. The company's total production capacity in 2009 was 96,000 tons, and its capacity utilization rate was nearly 100%. The increase of 155,000 tons raised will solve the production problem. We expect the company to raise steel wire ropes and wire ropes, and the chain and chain rigging projects will be 2010-2012. It will reach 20%/55%/85% respectively; 50,000 tons of metal rigging will reach 30%/50% in 2011-2012.

High barriers to the industry, the company's international market to accelerate the pace of development, the integration of upstream and downstream industry chain. Funds, technologies, qualifications, and design capabilities constitute barriers to entry into the industry's high-end products. The company’s research and development expenses account for more than 4%. The technology and design capabilities industry is absolutely leading and the qualifications are complete. With the operation of the five overseas direct sales subsidiaries at the end of the year, the company’s international Market development is worth looking forward to; the acquisition of the Shanghai Pujiang cable enables the company to extend the cable production to cable construction and maintenance inspections. The acquisition of Xushui steel structure also helps to enhance the synergistic effect of the company's products. We expect the integration of the company's upstream and downstream industry chains. Continue to advance.