Core views: 1. Incident The company released its 2013 annual report and 2014 quarterly report. 2. Our analysis and judgment 1) The effects of the strategic transformation are beginning to show. The results of the first quarter were amazing. The company achieved a total operating income of 486 million yuan in 2013 and net profit attributable to shareholders of the parent company of 74.6 million yuan, a year-on-year decrease of 7.49% and an increase of 5.83%, respectively; EPS of 0.045 yuan, an increase of 4.65% and an ROE of 3.45%, an increase of 0.14 percentage points over the previous year. Under the strategic guidance of management to actively promote the company's business transformation, the company achieved a total operating income of 180 million yuan in the first quarter and net profit attributable to shareholders of the parent company of 61.73 million yuan, with increases of 51.98% and 212.92% respectively; EPS 0.037 yuan, an increase of 208.33% over the previous year; and ROE reached 2.79%, a sharp increase of 1.87 percentage points. The company's net profit in 2014/Q1 is already equivalent to 82.75% of last year's full year. 2) The brokerage and investment banking business performance in Q1 of 2014 was steady, and the overall brokerage business performance of companies with outstanding proprietary and asset management businesses in the first quarter was steady, achieving a total brokerage business of 62.69 million yuan, a slight increase of 2.20% over the previous year. The average commission rate last year was about 0.119%, which remained stable. In terms of investment banking business, the company currently has 3 effective IPO projects, of which 3 are currently in session and 1 has given feedback; one has not yet been issued, and is expected to contribute around 23 million dollars in revenue. According to data related to the income statement, the company's investment income from its own business in the first quarter was about 83 million yuan, a sharp increase of 1.26 times over the previous year. The annualized return on investment in self-operated business calculated based on this data is as high as 19.94%, and the comparable caliber is far higher than that of peers. Furthermore, in 2013, the company achieved a total net income of 115 million yuan from the asset management business, while the 2014 Q1 company achieved revenue from this business of 13 million yuan in a single quarter, a sharp increase of 9.5 times over the previous year, which is equivalent to 85% of the total revenue of the business last year. This is the main reason why the company achieved a sharp increase in handling fees and commission income in the first quarter of this year. 3) Prospects for innovative business are promising. The inflection point of the company's performance is now that after the company successfully obtained business qualifications such as agreed repurchases and stock pledge repurchases last year, the company finally obtained the most important financing and securities financing business qualification in the capital intermediary business in January of this year. As the company successfully completed a fixed increase in April and significantly increased its net capital, it is foreseeable that in the future, the company will further supplement capital through a steady increase in leverage, expand and strengthen a series of capital intermediary businesses, which is expected to bring extremely impressive incremental revenue. Furthermore, the company has made many preparations for transformation in its brokerage and asset management business, and has taken the first step in expanding the capital market in Southeast Asia by setting up a joint venture brokerage firm in Laos. 3. Investment advice We believe that the company, as a small regional brokerage firm with very local characteristics, has already shown an inflection point in its performance this year, and there are prospects for a sharp increase in profit levels. The company is geographically located in a comprehensive financial reform zone along the border. Currently, the company's business qualifications are becoming more and more complete, and it is expected that innovative business will fully explode after the fixed increase is successfully completed. For the first time, we covered and gave a “recommended” rating, giving the 2014/2015 diluted EPS 0.089/0.143 yuan.