Event: The company released the 2013 semi-annual report performance forecast, and achieved net profit of 2018 million yuan to 23.21 million yuan in the first half of the year, an increase of 0% to 15% over the previous year. Moreover, the impact of non-recurring profit and loss on performance in the first half of the year was only 1.1 million yuan. Comment: 1. Compared with the first-quarter results, the second-quarter performance growth rate declined, and the company's performance in the first quarter was relatively good. Operating income increased 34% year on year, and net profit increased 26.9% year on year. According to the 2013 interim performance forecast, net profit was 14.69 million yuan to 17.72 million yuan in the second quarter, with a year-on-year growth rate of 0% to 20%. Compared to the first quarter's performance growth rate, there has been a decline. 2. The company's orders in the railway sector grew rapidly, and the company's box-type substation sales in the railway sector accounted for about 60% of this business. The box-type substation business declined last year due to slow construction of high-speed railways. Since the country restarted railway construction in November last year, the railway box transformation orders that the company received earlier began to be delivered one after another. The subsidiary Wuchang Electronic Control is the main platform for the company to obtain railway orders. The subsidiary orders announced as of May this year reached 97 million yuan. If the railway sector maintains this growth rate in the second half of the year, the company's performance this year will exceed expectations. 3. Profit forecast and investment recommendations Currently, we maintain our previous profit forecast. We expect earnings per share for 2013, 2014 and 2015 to be $0.40, $0.44, and $0.49, respectively. The PE corresponding to current stock prices in 2013, 2014, and 2015 is 19 times, 17 times, and 15 times, respectively. Currently, the valuation is at a low level. We will decide whether to raise the rating based on subsequent circumstances and maintain the “prudent recommendation” investment rating for the time being.