The company recently signed the "Project Cooperation Agreement" with the Jiuquan Municipal Government of Gansu Province and will invest in the construction of a complete set of photovoltaic inverters and wind energy converters in Jiuquan City, Gansu Province with a total capacity of 1,000 megawatts. The main contents of the agreement are: (1) The Jiuquan government allocates a certain proportion of photovoltaic power generation resources to Party B each year in order to support Party B's production of equipment manufacturing facilities in Jiuquan. Give company preferential policy support.

(2) The Jiuquan government encourages photovoltaic, wind power projects and enterprises invested in Jiuquan to prioritize the use of the company’s equipment in Jiuquan, and actively assists in the preliminary work of the relevant photovoltaic projects to ensure the grid access and land use procedures.

(3) Within six months from the date of signing of the agreement, various tasks of project construction will be carried out, and the project will be completed and put into operation one year, and it will gradually reach production.

(4) The company will be registered project company in Jiuquan City, responsible for the construction and operation of the project, and in the local tax payment, insurance, financing, under the same conditions, the preferred employment of local staff, the use of local equipment and materials, accept quality certification.

Comments:

This cooperation is part of the framework agreement for cooperation in photovoltaic industry development signed by Hefei City and Jiuquan City. The Gansu region is an important market for China's new energy, especially photovoltaic solar power generation. The cooperation will bring the company's products closer to the market demand, and the long-term strategic partnership will also lay a solid foundation for the company to continue to develop and consolidate the market in the northwest region. The company's ability to directly build capacity in areas that are closer to the photovoltaic market will help the company reduce channel costs and after-sales service costs, and enhance the competitiveness of its products.

As the company's strategic cooperation will gradually reach a year's time, it will have little impact on the company's business in the short term, but it will have a positive impact on the company's long-term status in maintaining domestic PV inverters, which is important for the long-term development of the company. Strategic significance.

Revisions to earnings forecasts, investment ratings and valuations:

We maintain our profit forecast for 2011 to 2013, net profit will reach 172 million yuan, 251 million yuan and 325 million yuan respectively, and the compound annual growth rate of net profit will reach 30% in the next three years, corresponding to EPS of 0.96 yuan, 1.4 yuan, and 1.81 yuan. yuan. Cut the company’s target price to 35 yuan and maintain a “buy” rating.