Incident: Jiangling Motors announced the October 2014 Production and Sales Report. It recorded sales volume of 21,446 units in October, a slight decrease of 1.3% from the previous year. Production was 23001 units, an increase of 12.3% over the previous year. Comment: The cumulative sales volume from January to October continued to grow: In October 2014, the company's automobile sales volume was 21,446 units, a slight decrease of 1.3% over the previous year and a decrease of 9.5% over the previous year. The cumulative car sales volume for January-October was 216,000 units, up 15.7% year on year. 2. Light passenger sales volume declined, pickup truck performance was mediocre, and light truck performance was good: In October 2014, Ford brand light passenger sales were 5019 units, down 16.8% year on year and 25.4% month on month. However, compared to the whole year, the cumulative sales volume of light trucks in January-October was 56,000 units, up 2.6% year on year; light truck products continued to benefit from the implementation of the emissions policy. Sales volume increased 3.6% year on year to 8109 units, down 9.8% from month to month, and the cumulative sales volume of light trucks increased 23.4% to 810,000 units from January to October, and the performance was still good. The sales volume of pickups this month was 6317 units, up 8.6% year on year, down 6.8% month on month, and cumulative sales volume from January to October was the same as last year. 3. Factory relocation affected Yusheng's SUV sales volume: In October of this year, the company's Yusheng SUV sales volume was 2001, a slight decrease of 2% over the previous year. However, compared to the slump in the previous two months, sales continued to pick up from August, with a month-on-month increase of 68.3%. Yusheng's slump in sales is mainly related to the relocation of the company's plant. It is expected that with the end of the relocation, sales volume will pick up somewhat. The cumulative sales volume for January-October increased 141.1% year over year to 22,000 units. 4. Sales of light trucks and light buses are expected to continue to grow. Ford SUVs are expected to be launched next year: It is expected that sales of SUVs will increase in the fourth quarter, while the implementation of the national IV standard will begin on January 1, 2015, which will continue to drive sales of this product. The company's product structure is expected to be further improved, and the gross margin level will rise steadily. In terms of costs, the cost rate is expected to drop next year due to proper cost control of the company's expenses and the full cost of many R&D investments in the early stages. The company's investment in production capacity in recent years has come to an end, and the Xiaolan base will complete the relocation work by the end of this year to produce pickups, SUVs, light buses, etc. Although the three-fee increase was high in the first three quarters, it is believed that as the company's new projects are gradually put into production and the product structure is adjusted, the share of expenses will gradually decline. Judging from the new products, Ford's 7-seater medium to large SUV Everest will be domestically produced in 2015, marking that the company has officially become another passenger car platform for Ford in China. Currently, there are few similar domestic SUV products, and the prices are high, which cannot meet the growing demand of the SUV market very well. 5. Summary and comment: We forecast that the company's 2014-2016 EPS will be 2.35 yuan, 3.22 yuan and 4.14 yuan respectively. Taking into account the company's shareholder background, stable past performance and high dividend ratio, we maintain the company's target price of HK$40.0, equivalent to 9.9 times PE in 2015, and maintain a highly recommended rating.