Incidents: The company's 2013 performance report shows that during the reporting period, total revenue was 2,499 billion yuan, down 8.2% from the same period last year; net profit attributable to owners of the parent company was 76.3 million yuan, an increase of 77.2% over the same period last year; and basic earnings per share was 0.32 yuan. Comment: 1. Traditional technology, industry and trade models are difficult to maintain, and large investment returns help the company reverse losses. The company's profitability is unspeakably optimistic due to the decline in the gross margin of various businesses across the board. The change in net profit from negative to positive in the past three years is mainly based on investment income. The investment income achieved by the company in 2011-2013 was 189 million, 100 million, and 220 million, respectively, accounting for far more than 100% of operating profit. This means that if the impact of non-recurring income on the company's profit sheet is deducted, the company's main business has been losing money for 5 years in a row. This is mainly due to the business model driven by domestic and foreign trade, and the added value of the brand is too low. Against the backdrop of weak external demand, the extremely low gross profit level of the company's original business is no longer sufficient to cover rapidly rising domestic labor costs. 2. Shifting to emerging industries, business restructuring is expected to improve profitability. Faced with the difficulties of traditional business models, since 2012, the company has sought to control costs through internal asset and resource restructuring, and accelerate the layout of emerging industries represented by energy saving and emission reduction through external mergers and acquisitions. The company acquired 51% of the shares in “Blueprint Energy Saving” in April 2012 and officially entered the field of industrial energy saving. The company is mainly engaged in the investment, construction and operation of waste heat power generation projects, and has been registered as the second batch of energy saving service companies by the National Development and Reform Commission; at the end of September 2012, it acquired 51% of the shares of Meiyu New Technology (Shenzhen) Co., Ltd. and changed its name to FuRi Yumei to vigorously develop the mobile communications industry; it acquired 92.80% of the shares in Shenzhen Mirui Optoelectronics in late 2013, focusing on developing the LED display business. Since then, the company has completed the sorting and layout of the three new industries of energy saving and emission reduction, such as the LED industry, industrial energy saving, and energy-saving home appliances and communication products. The subsequent revenue structure is expected to continue to improve, and the recovery in gross margin will slightly increase profitability. 3. There is still great uncertainty about the LED business and non-recurring revenue, so there is no rating yet. Although the company has extensively sorted out its business in recent years, considering that its emerging industry sector is plagued by structural overcapacity problems in the LED industry, profit sustainability has yet to be confirmed; the home appliance and communication product line is still at a low level due to lack of brand building support; the company's medium- to short-term profit certainty is not convincing, and its performance growth will still mainly depend on contributions from the non-recurring revenue side. Currently, the company still holds a small number of shares in Huaying Technology (000536) and Guotai Junan Securities. It can continue to contribute considerable investment returns in the future if it is cashed out, but we are unable to accurately incorporate it into our predictions. Based on this, we assume that the company's investment income in 2014 and 2015 was 80 million yuan and 70 million yuan, respectively. According to the estimate of completing a fixed increase of about 45 million shares in the first half of the year (total share capital increased to 285 million shares), we expect the company's EPS in 2014 and 2015 to be 0.24 and 0.29 yuan, respectively, and the corresponding PE of 34 and 29 times, respectively. First coverage, no ratings yet. 4. Risk warning: The economic recovery in Europe and the US came to an early end, the LED industry's downstream overcapacity led to a downturn in industry prosperity, Mindray Optoelectronics's performance did not meet expectations, and A-share systemic risks