The results of continuous-than-expected BUY rating The company announced on January 5, the optical fiber preform project has been completed. Test Replica Hermes Watches run to the end of March 2010, subject to the EIA, officially put into operation after acceptance. Due to the technological renovation and expansion on the original design, so that in the case of total investment has not changed, the production of the item can be increased to 200 tons / year from the planned 100 tons / year. Preform 2010 earnings are expected to thousands of yuan. Since the project was officially put into operation since 2Q10, equivalent effective annual production capacity of 150 tons, according to the current market price of $ 170 light bar / kg projections, contributed revenues of about $ 150 million. Depreciation of fixed assets less than 30 million / year (total investment of 33.5 billion yuan, of Replica Technomarine Watches which more than 200 million yuan investment in equipment, the equipment is depreciated over 10 years Buildings 30 years as a depreciation), labor costs and costs less than 10 million yuan (the project invested about 50 people or so, according to the per capita cost of 10 million / year assumptions), a rough projection the preform the profitability of the project up to a thousand million. Moreover, the company has begun homemade preform equipment, homemade significantly lower cost than outsourcing, which means preform project profitability Bvlgari Watches will continue to improve. 2010 is expected to import preform supply tight, prices are likely to rise. Commissioning of homemade preform help stabilize the cost of their own light bar, have the cost advantage of domestic fiber market competition in 2010, thereby bringing increased market share. Early 2010 fiber production is expected to reach 12 million core km, corresponding to the the preform needs of about 400 tons. 150 tons can be self-sufficient, the outsourcing needs 250 tons, that is a great purchase volume compared to 2009 did not have significantly increased, therefore, for the light bar suppliers, price momentum is not strong. But for those who do not preform self-sufficiency, but the fiber optic capacity expansion larger Fiber enterprises, the preform suppliers abroad capacity is fixed (not easily expand), once the demand for significant growth, the preform may follow prices. Therefore, compared with its competitors, the 2010 the fiber cost advantage will appear, which is likely in the tender with the price advantage to gain more market share. 09,10 fiber capacity significantly expanded to the fiber business profitability is expected to be driven by an increase of more than 20. Expected 2009 effective fiber production capacity of 7.25 million kilometers (six in early drawing tower end of the year has increased to 11 tower production), 2010 effective capacity to 15 million kilometers (early 2010 fiber production capacity of 12 million core km, planned Phase III expansion, continue to increase 7 La Sita), an increase of 106.9. Assuming that the fiber prices from $ 84 in 2009 / core km down to 76 yuan / km core fiber business gross profit year-on-year increase of 22. SW that 2010 production of fiber digestion is not a problem, on the one hand, from the domestic market share continue to enhance the other hand, from the rapid growth of overseas markets, the company has been working on the construction of overseas factories. The previous announcements injected two assets communications cable (100) and power cable (75) is expected to total profit contribution in 2009 of more than 80 million yuan (not yet got the approval of the Commission, can not enter the 2009 Annual Report), 2010 earnings growth is expected to be at least 30. The power cable revenue in 2009 is expected to also 10 billion yuan, net profit of 45 million yuan, the company planning the next three years, growth will remain above 30 points of growth from high-voltage cables, flexible cables, bare wire and low-voltage cable. Expect 2009-2011 EPS were 1.1 yuan, 1.7 yuan and 2.2 yuan (including 10 and 11 years to consider the cable and power cable assets into the 2009 pro forma EPS is expected to be 1.2 yuan), corresponding to the current share price is only 19 times 2010 PE , reiterated a buy, 36-month target price of 43 yuan. The long term, the completion of the fiber vertical integration, on the one hand means that our cost advantage, really established, on the other hand, to get rid of the upstream capacity constraints, the market space to further open. With the global fiber-optic capacity is becoming increasingly apparent trend to shift to China, SW, the company will eventually become a global fiber business. The short term, SW believes that the preform project is still cautious profit forecast, the actual situation may be better than SW expected thus bring-than-expected earnings.