Investment points: The company's issuance plan was reviewed and approved. The company plans to privately issue additional shares. The planned number of non-public shares will not exceed 80 million shares, raise 1 billion yuan in capital, and increase the price of 1,259 yuan/share. The company's additional distribution plan has been reviewed and approved. The company will begin additional distribution work in the short to medium term in the future. Since the plan has already been approved, the company will start distribution within a short period of time. However, the current stock price is already lower than the increase price planned by the company, so the company will endeavor to complete the additional distribution work as much as possible to draw market attention. The company's hydraulic transmission products will grow rapidly in 2012 as market demand for hydraulic torque converter products increases and the company's production capacity gradually reaches production. It is expected that the company's hydraulic torque converter revenue will expand rapidly in 2012. Sales revenue is expected to reach 350 million yuan, up 200 million yuan year on year from 150 million in 2011. Stable management of pumps and chemical biological equipment The company's pump products and chemical biological equipment public business markets are developing steadily, and the two weakly cyclical businesses have improved the stability of the company's performance. The company will focus on the construction of hydraulic torque converter projects starting in 2012. The company will carry out key projects - automobile hydraulic torque converter construction projects. It plans to build five hydraulic torque converters for passenger cars, one hydraulic torque converter for commercial vehicles, and production lines for core components and related auxiliary facilities, reaching production capacity for automobile torque converters with an output of 1.8 million units per year, and achieving sales revenue of 2 billion yuan. The hydraulic torque converter market is extremely broad. Hydraulic torque converters are the core components of AT automatic transmissions. Currently, more than 95% of China's automatic transmissions depend on imports. In 2011, China's automobile production reached about 18.5 million units, including about 13.7 million passenger cars. It is estimated that within the next 5 years, passenger car sales in China will probably reach 20 million units/year, and automatic transmission sales volume can reach 10 million units/year. The hydraulic torque converter market has broad prospects. Profit forecast and investment recommendations We expect the company's EPS in 2012, 13, and 14 to reach 0.37, 0.58, and 0.68 yuan/share, based on the 2013 25 times PE valuation, with a reasonable value of 14.60 yuan. Recommended rating risk warning: The development process of AT automatic transmissions has unpredictable factors