JAC's 1-5 month cost has dropped significantly. It is expected that the gross profit for the 1-5 months of MPV's Ruifeng business will be 3-4 percentage points higher than the full year of 2008. The gross profit of light trucks is expected to be 6-7 percentage points higher than the full-year level of 2008. Considering that the sales volume of Jianghuai Group increased significantly in the second quarter, we expect the company's profitability in the second quarter to increase substantially, and it will turn around in losses from January to June to achieve better results.

Due to the earlier listing time of Ruifeng I, the amortization of research and development, molds, fixed assets and other expenses has been gradually reduced, and the corresponding supplier also has the advantage of a substantial reduction in fixed costs. In addition, due to the lower prices of raw materials such as steel , it is expected that 1-5 The monthly purchase cost of a single unit will be reduced by more than 5,000 yuan. It is expected that the annual gross profit level will reach 29%.

We expect the JAC light truck narrow-body, medium-body and wide-body light trucks to have a 4:4:2 ratio, with a higher gross profit, and some of the medium-duty light trucks will be powered by JAC's self-produced engines, and the associated costs will be reduced. In addition, benefiting from the decrease in raw material costs, we expect the gross profit of the young card business in 2009 to be nearly 14%. It is conservatively expected that the sales volume of light trucks in 2009 will increase by 19% year-on-year.

We estimate the gross profit loss of the car segment in 2008 to be around RMB 300 million. It is expected that there will be a significant drop in the single-family cost of Tongyue's more than 50,000 units. We expect that the gross profit of the car will be positive in the fourth quarter, and the gross profit for the whole year will still be negative, but it will greatly reduce the loss compared to the year of 2008. It is estimated that sales of sedan will be 57,000 in 2009.

We believe that JAC has the opportunity to significantly reduce costs in 2009. It is expected that the company will be able to turn losses in the first half of the year. It is expected that the demand for MPV will be stable in the second half of the year and light trucks will continue to sell better. Throughout the year, it achieved a performance of 0.2 yuan or more, significantly surpassing the level in 2008. At the same time, we believe that the gross profit of MPVs and light trucks will be high in 2009, and will gradually decline with rising costs in 2010. However, it is expected that the earnings of the car segment in 2010 will help Jianghuai improve its earnings. The current market forecast of the company's 2009 and 2010 earnings per share is about 0.22 yuan and 0.38 yuan, which is basically in line with our expectations. We think the current valuation of the company is low.