Profit forecast and investment advice: we expect the company's EPS for 13-15 years to be 0.26,0.31 and 0.36 yuan respectively, with net profit growth rates of-6%, 18% and 17% respectively, corresponding to 28 times and 23 times PE for 13 and 14 years, respectively.

The company is the leading enterprise in the domestic Roots blower industry, with a current market share of about 20%. Under the background of shrinking demand for blowers in the traditional downstream industries such as metallurgy and chemical industry in the past two years, the company's performance has shown negative growth. The company is expected to improve its performance in the future through three aspects: 1) since 2013, orders for blowers for downstream environmental protection industries (sewage treatment and desulphurization) have grown steadily and rapidly, with revenue of about 100 million yuan in 2013 (contributing about 20% of the company's gross profit). With the gradual increase in the intensity of government treatment of sewage and air pollution, the demand in the field of environmental protection will continue to improve the performance of the company. 2) through epitaxial development, the company is expected to further seize the centrifugal blower market or open up a new compressor market, which will effectively promote the rapid improvement of the company's performance; 3) the company is developing low-cost Roots blower products. In the process of putting it on the market in the future, it will recover some of the markets that the company has lost in the past two years, which will have a positive impact on performance growth. We cover the company for the first time, giving the company an "overweight" rating.

Risk hints: the demand for blowers in metallurgical and chemical industries has dropped sharply, and the treatment of sewage and air pollution by national policies is not up to expectations.