There is a unique opinion on the decline in performance in 2012, but we believe this is a brief adjustment in the company's transition from episodic expansion to connotative development. Driven by industry growth and the influence of the company's marketing network entering a harvest period, the company's long-term growth trend has not changed, and the steady growth in performance will gradually relieve the pressure of the company's overvaluation. Investment points 1. Agricultural machinery chain management is in its infancy, accounting for only 2% of output value. As the agricultural machinery distribution industry shifts from “small circulation” to “large circulation,” agricultural machinery chain management has a lot of room for development. 2. The sharp decline in revenue in the construction machinery sector (down more than 30%) dragged down the company's performance in 2012, and the agricultural machinery sector maintained growth of around 30%. We expect that the company's operations will improve in 2013, and the revenue growth rate will return to more than 10%. 3. Factors affecting the company's future performance include: channel construction, capital conditions, and downstream demand. Channel construction: In 2012, the number of direct-run stores reached about 235. In the absence of new capital raised for construction, the number of direct-run stores of the company will not increase significantly. In the future, the increase in the company's revenue will mainly come from the increase in the profitability of individual stores. Capital situation: The agricultural machinery distribution industry is capital-intensive, and the company's expansion also requires financial support. We expect the company to launch a refinancing project. The new capital will mainly be used for the construction of outlets in the north and the construction of urban outlets to achieve the goal of a more reasonable channel layout and further decline. Profit forecast: From 2012 to 2014, we expect the company's operating income to be 5.5 billion yuan, 6.2 billion yuan and 7 billion yuan, respectively, up 7.74%, 13% and 13% year on year, and net profit of 53 million yuan, 77 million yuan and 11 million yuan respectively, down 24.7%, 45.7%, and 42.3% year on year respectively. The corresponding EPS is 0.15 yuan, 0.22 yuan and 0.31 yuan, PE is 56 times, 38 times and 27 times, giving it a “recommended” rating. Risk warning: Reduced demand for agricultural machinery due to reduced agricultural machinery subsidies; problems with the company's capital operations.