On May 14 we carried out a field research on the company. The company’ loaders were in the replacement period with 5t series as the most. High-end machines subject to capacity of parts can not be fully released. After the completion of technical transformation of accessories at the end of Q3, the self-manufacturing rate will be up to 90 percent and monthly output of high-end machines is expected to double. In Q1, sales of loaders totaled 8,413 units and in April, the sales reached 3,700 units. Total annual sales amounted to 30,000 units and the market share rose from 17 percent to 18 percent. Due to rising steel prices, the company has been brewing the fourth price hike. The completion of Jiaozuo Base will expand the production capacity of loaders and compared with manufacturing department, cost of each machine can be reduced by over 10,000 yuan. In 08, the company is expected to export complete machines about 8 percent of the total; the share of export revenue will reach around 10 percent, representing a substantial increase over 07. Excavators will be the company's future strategic products. Total sales of excavators in Q1 added up to 159 units and 100 units in April. We forecast its 08-10 EPS to be 0.63 yuan, 0.96 yuan and 1.29 yuan respectively and "overweight" rating is unchanged.