Event: The company released its three-quarter performance forecast: In the first three quarters, the company achieved net profit of about 13.45 million yuan, a year-on-year decrease of about 71.71%. Among them, net profit of about 3.22 million yuan was realized in the third quarter in a single quarter, a year-on-year decrease of about 47.21%, and the decline narrowed. (Net profit for the first half of the year decreased by 32.16% year-on-year) Comment: Steady improvements in fundamentals can be expected 1) According to the plan of “mainly sedans and light vehicles, supplemented by microcars”, the company has adjusted its product structure. Currently, it has more than 70 varieties, including 371A; currently, crankshaft products are mainly supported by major independent brand OEMs such as Chongqing Changan, Geely, Chery, BYD, JAC, and Great Wall, as well as engine manufacturers such as Dongan Power, Wuling Liuzhou Machinery Factory, Chengdu Chengfa, and Dongfeng Light Engine. 2) Sales were sluggish this year due to major brands being squeezed by joint venture brands. Sales volume increased by only 3.16% in the first September, significantly lower than the 10.16% growth rate for passenger cars in the same period. At the same time, the company is actively adjusting its product structure. Coupled with factors such as the annual decline in product prices (the sharp drop in raw material prices since this year has had a significant impact on the company's product prices) and the debt restructuring income of 26.8 million yuan in the first quarter of last year, it has led to a sharp decline in performance. 3) The new round of energy-saving vehicle subsidy model catalogues favors independent brands. Coupled with peak season factors, we believe that the month-on-month growth rate of independent brands will recover, and it is unlikely that product prices will continue to be drastically adjusted. A month-on-month recovery in company performance in the fourth quarter is a probable event. In the medium to long term, as the company actively develops new customers, adjusts the product structure, and puts into operation a new production line with a higher automation rate, the company's business performance will continue to improve. A catalyst for future stock prices 1) First, the majority shareholder Haowu Mechatronics has excellent asset qualifications. In addition to benefiting from the development and growth of the controlling shareholder Bussan Group, the company may become a capital platform for the securitization of the automobile mechatronics sector of the property group; secondly, the company raised 400 million yuan of additional capital to the majority shareholders to supplement liquidity. The company and three PE companies in Tianjin initiated the establishment of a technology-based SME venture capital fund, and will introduce a Ministry of Science and Technology guidance fund to invest mainly in emerging industries such as advanced manufacturing, electronic information, new materials, and high-tech services. At the same time, the Securities Regulatory Commission plans to eliminate major administrative restructuring of assets other than backdoor listing for major asset restructurings and Add M&A payment and financing instruments such as M&A funds. These will facilitate and provide policy guarantees for the company to smoothly carry out capital operations to improve the company's business structure and enhance the company's profitability. The profit forecast takes into account that the company is currently in a period of adjustment of production line and product structure, and is actively developing new customers. Coupled with high certainty about the recovery of its own brands, the gradual stabilization and improvement of the company's main crankshaft business is a probable event. Keeping the profit forecast unchanged, the company achieved an EPS of 0.11/0.12/0.17 yuan/share in 2014-16, respectively, maintaining the “increased holdings” rating. Continued attention is recommended.