Maintain the overweight rating. We expect that the official production of the fundraising change project in the second half of the year will lead to a substantial increase in profitability, raising the company's 2014-2015EPS to 0.09max 0.16 yuan (formerly 0.07max 0.13). Taking into account the continued acceleration of the strategic pace and the high growth brought by the project, the target price will be given 10.98 yuan, space 32%, and increase the holding rating.

The performance is basically in line with our expectations. In 2013, the company's income / return net profit was 43.79-54 million yuan respectively, an increase of 12%, 624% and-0.086 yuan respectively over the same period last year, which is basically in line with our previous expectations. The sharp decline in performance is due to the fact that Xinsheng Electric, a subsidiary, has put into production 120000 tons of copper rods, and its annual sales are expected to be about 60,000 tons, but its income will not increase profits, bad debts will increase greatly, and its annual loss will be 36.53 million yuan.

The commissioning of 40,000 tons of high-precision belt is expected to bring about an accelerated reversal in performance. The commissioning of the current equipment of 40,000 tons of copper precision strip in the fund-raising and replacement project is normal, and trial production is expected to begin in June at the earliest. Negotiations with downstream customers such as Japan are under way, and full production is expected in the second half of the year. It is expected that the performance growth will accelerate after it is put into production. The company's performance has reached an inflection point, and the gross profit margin has increased from 2.8% in 2013 to 4.3%.

We will continue to take a firm step towards emerging industries. The company plans to use 310 million yuan to put into production 10,000 tons of automobile connectors and high-precision tinned copper strip for the electronic industry. With the help of the technology and channel advantages of Guhe metal, the project uses 40,000 tons of high-precision belt as raw material for further deep processing. The processing fee is expected to reach 10,000 yuan / ton, and the processing cost is 3000 yuan / ton. We believe that, following the acquisition of Guhe Metal and the production of 40,000 tons of copper high-precision belt, the project will further clarify the lower reaches of automobiles and electronics, fully reflect the company's willingness to transform to new industries, deepen the direction of strategic change, and reform or speed up in the later stage.

Core risk: the downstream demand development of 40,000 tons of high-precision belt is not smooth after it is put into production this year.