China Heavy Truck: Sales confirmation slightly lower expected bill event Impact Limited

4-quarter heavy truck sales were slightly lower than expected. 4 Quarter, the company's heavy truck total sales of 24,432 units, an increase of 20.5% year-on-year, a small increase of 2.7%. 2010 Annual sales of 109,312 vehicles, an increase of 35.7%.　　As the product in transit is confirmed slightly less than originally estimated, the production and sales gap is further widened. The case of financial instruments is clear and has limited impact. The case is the company's subsidiary of the Bridge Box Company, the amount involved 500 million yuan.　　Because the company only holds 51% stake in the bridge box company, and the company is cooperating with the government and the judiciary to investigate and recover funds, it is expected that the money recovery is more likely to have a limited impact on corporate finance. Terminal demand in the 1 quarter continued high, the peak season is expected to arrive early. Sales are expected to be better than expected in the 1 quarter as new projects and logistics demand are strong.　　The company is actively strengthening production preparation, is expected to 1 quarter sales and market share will be steadily increased. The price of products to increase digestion costs increased pressure, 1 quarter profit margin continued high.　　January, the company's heavy card products average price increase of 4000-5000 yuan, can basically digest the 4 quarter since the main raw material procurement prices. Valuation and recommendations: Based on the continued rise in raw material costs and 4 quarterly heavy card confirmed sales were slightly lower than expected, we slightly reduced the company 2010 and 2011 earnings per share forecast to 2.09 yuan and 2.51 yuan, the downward adjustment of 10.4% and 3.1% respectively. At present, the stock price corresponds to 2010, 2011 Dynamic P/E 12.5 times times and 10.5 times times respectively, the valuation is at the low-end of the industry. Taking into account the company as a heavy truck industry leader will benefit from the continued strong terminal demand, and 2012 Mann cooperation project will further enhance the competitiveness of the company in the high-end market, we maintain the company's "recommended" investment rating.