I. Overview of events. The company released its 2014 annual report on the evening of March 26, achieving operating income of 609.36 million yuan, a year-on-year decrease of 26.48%, and net profit attributable to shareholders of listed companies of 73.88 million yuan, a year-on-year decrease of 27.13%, which is at the bottom of the performance forecast of -10% to -30%. In 2015, the company will get rid of the base impact of pipe gallery projects, and the intelligent equipment and automation integration business will continue to grow rapidly. We carefully adjusted the EPS for 15-17 to 0.39, 0.58, and 0.77 yuan, respectively, to maintain the “highly recommended” investment rating, and raised the reasonable valuation range for 6 months to 30 to 32 yuan. II. Analysis and Judgment. Revenue fell 26.48% year on year due to the impact of the Hunnan integrated pipe gallery project base. Currently, the company mainly includes three main businesses: intelligent machinery and equipment, electrical automation and integration, and smart cities. The intelligent machinery and equipment business recovered strongly in 2014. After two years of negative growth, revenue increased 17.81% year on year; electrical automation and integration continued to grow rapidly, with revenue increasing 67.48% year on year. The smart city business includes engineering business and digital factories. Revenue fell 51.52% year on year, mainly due to the 13-year base of the engineering business (that is, the Hunnan integrated pipe gallery project). The digital factory business is progressing steadily, with a year-on-year increase of 25.31%. The consolidated gross margin rebounded markedly, and the cash flow situation improved. The company undertook the Hunnan integrated pipe gallery project. The amount was huge and the gross margin was low. 13 years was the peak of revenue confirmation for the project. Since 2014, as the Hunnan integrated pipe gallery project has come to an end, on the one hand, the share of high-margin intelligent mechanical equipment and electrical automation and integration has increased, bringing the comprehensive gross margin back to 32.56%, an increase of 6 percentage points over the same period last year; on the other hand, the pipe gallery project has begun to repay, and the cash flow situation has improved, and the net cash flow from operating activities has changed from negative to positive to 98.36 million yuan. Performance forecast for the first quarter of 2015: Net profit fell 10% to 30% year on year. Net profit attributable to shareholders of listed companies in the first quarter of 2015 was 1,07774 million yuan to 135.995 million yuan, down 10% to 30% from the same period last year, mainly because although the construction of the second phase of the Hunnan integrated pipe gallery project was partially completed, related business was not carried out in the first quarter due to seasonality and other factors. The three major businesses are developing in a coordinated manner, and logistics automation is an added highlight. The fund-raising project, the energy-consuming industrial intelligent unit integration system industrialization project and the fully automatic radial tire molding machine industrialization project, were officially put into operation on September 30, 2014 and December 31, 2014, respectively, and production capacity will be fully released. The company will continue to expand its digital factory business on the basis that intelligent mechanical equipment and electrical automation and integration continue to grow rapidly. The company's newly established logistics automation division mainly targets tire manufacturing, FMCG, package sorting and other fields. It provides transportation, transfer, sorting equipment, stacking, industrial robots, three-dimensional warehouses, etc. Complete solutions for logistics automation systems, including control and management systems, will become a new growth point for the company's future performance. 3. Stock price catalysts and risk alerts. Stock price catalyst: Breakthrough in epitaxial acquisitions; the company undertakes orders for new smart cities and digital factories. Risk warning: The company uses BT to accept government orders, and there is a risk that repayment will be delayed; currently, the company is in a period of rapid expansion of scale and personnel, and there are certain management risks. 4. Profit forecast and investment advice. At present, the company's orders for intelligent machinery equipment and automation integrated systems are full and growing steadily. We are optimistic about the company's continuous deepening expansion in the fields of digital factories, precision machinery, and logistics automation for a long time. According to the current progress of the company's various businesses, we carefully adjusted the EPS for 15-17 to 0.39, 0.58, and 0.77 yuan, respectively, to maintain the “highly recommended” investment rating, and raised the six-month reasonable valuation range to 30 to 32 yuan.