Matters: Deli Co., Ltd. released its 2013 three-quarter report, achieving operating income of 650 million yuan in the first quarter to third quarter, an increase of 27% over the previous year; net profit attributable to shareholders of listed companies was 80 million yuan, an increase of 30% over the previous year (up 54% year on year after deduction), and EPS was 0.23 yuan, in line with the predicted year-on-year growth rate of 25% to 45% in the company's interim report. The company expects net profit for the full year of 2013 to increase by 10% to 30% year on year. Ping An's view: Influenced by multiple factors, the company's 3Q performance weighed on the company's 3Q single-quarter revenue and net profit, which increased 16% and -64% year on year, respectively, a slowdown from the growth rates of 34% and 132% in the first half of the year. The pressure on 3Q performance is influenced by various factors, mainly including: 1. The cessation and maintenance of furnace 2 and furnace 8 in 3Q affected revenue growth; 2. Some products in the dealer channel were affected by bow and arrow promotions, and sales prices declined year-on-year. The overall gross margin was reduced by 6 points from 3Q12 and 2 points from 2Q13, respectively; 3. The concentration of goods in the supermarket channel in 3Q, and corresponding expenses such as entry fees were calculated centrally; 4. The Chuzhou Crystal Cup project was put into operation in September, and depreciation for the reporting period began in 3Q, but depreciation for the reporting period began. The Chuzhou crystal cup project was put into operation, adding further impetus to growth as the leading domestic daily-use glassware leader, and the structural upgrade promoted the company's long-term growth. In mid-September 2013, the company's Chuzhou Crystal Cup project was officially put into operation. It is expected that the project will be positioned as high-end, with a gross margin of 45%, which will add further impetus to the company's growth. Profit forecasts and valuations 3Q companies were affected by multiple factors, which dragged down the overall performance growth rate. Although the above factors are mostly non-recurring influencing factors, considering the impact of bow and arrow promotions on the company's dealer channels, it is prudent to assume that the 13-15 EPS will be slightly lowered from 0.34, 0.57, and 0.75 yuan to 0.30, 0.53, and 0.69 yuan, corresponding to the closing price of 10.97 yuan on October 25, 2013, PE is 36.3, 20.8, and 16.0 times, respectively. Considering that the company has built its own KA channel and terminal delivery is progressing relatively smoothly, it is expected that in the future, the competitive pressure faced by the dealer channel will be partially relieved and the “recommended” rating will be maintained. Risk warning: the progress of structural upgrades is lower than expected, fluctuations in raw materials and fuel prices, etc.