Business outlook: Automotive torque converters will drive the company's rapid growth. Domestic automobile production is growing rapidly, and demand for automobile torque converters is strong. By 2015, domestic automobile production will exceed 26 million units. Of these 20 million passenger cars, automatic transmission passenger cars equipped with automatic transmissions are expected to reach about 10 million, that is, the demand for automobile torque converters is 10 million units. A large number of domestic enterprises have independently developed and produced automatic transmission products. According to the production capacity plans of various manufacturers, the output capacity of 4 million automatic transmissions will be reached by 2015. The company's automotive torque converter market continues to expand. After passing various tests by ZF in Germany, the leading manufacturer of power transmission products in global technology and the market, and becoming a global supplier to the ZF Group, it has also passed the strict inspection and verification of the world's top 500 and the world's largest construction machinery and heavy vehicle manufacturer, American Caterpillar, and has become a strategic supplier for Caterpillar. At the same time, the company has successively signed strategic cooperation agreements with Hunan Rongda, Huatai Automobile, Shandong Tines, and Tai'an Special Vehicle, etc., becoming strategic partners, reaching cooperation intentions with Geely Automobile, Chery Automobile, Weifang Shengrui, Shaanxi Heavy Duty Truck, Fast and other companies to develop products. The company has now completed the maintenance and modification of the key equipment for the hydraulic torque converter production line of Ford in the United States, and built an automatic production line for automobile hydraulic torque converters with an annual output of 100,000 units, so the company's automobile torque converter product production model has changed from a single-piece production model to a production line mass production model. The company's hydraulic torque converter products plan to achieve sales revenue of 350 million yuan in 2012, 1.8 million torque converters for passenger cars in 2015, and sales revenue of 2 billion yuan. Profit forecast and investment advice: We expect the company's 2012, 2013, and 2014 EPS to be: 0.292 yuan, 0.378 yuan, and 0.473 yuan, respectively. The current stock price corresponding to PE is: 45.45 times, 35.06 times, and 28.06 times, respectively, giving it a “recommended” rating for the first time.