Profit forecast.

We believe that the company is one of the important construction machinery companies in China, because the construction machinery industry is in a downturn, which affects the company's income, but the company has successfully issued corporate bonds and has the ability to tide over the industry trough steadily. We expect the company's EPS in 2012, 2013 and 2014 to be 0.49 yuan, 0.51 yuan and 0.61 yuan respectively, corresponding to PE 12.5x, 11.9x and 10.02x respectively. We downgrade the company to "neutral" with a target price of 6.89 yuan.

Risk hint.

If the growth rate of domestic investment continues to decline, leading to a continuous downturn in the construction machinery industry, it will affect the stability of the company's future earnings.