Note: Dongan Power released a quick production and sales data report for August 2016. Comment: The sales volume of the headquarters maintained more than double growth in August. Mitsubishi's performance continued to be steady. In August 2016, the engine production/sales volume of Dongan Power Division was 17,354 units/15,234 units respectively, up 155.47%/110.41% year on year; the cumulative production/sales volume as of the end of August was 198,800 units/192,200 units, respectively, up 119.94%/114.25% year on year. The production and sales volume of the subsidiary Dongan Mitsubishi was 22,686 units/19,543 units respectively, up 9.46%/36.10% year on year; the cumulative production/sales volume as of the end of August was 285,500 units/286,700 units, respectively, up 27.46%/31.39% year on year. In summary, Dongan headquarters continued to maintain rapid growth (115% year-on-year increase in January-July, 110% year-on-year increase in August), mainly benefiting from downstream customer volume (especially Changan Auchan, BAIC Weiwang, etc.), and production and sales declined month-on-month, mainly due to seasonal fluctuations; Dongan Mitsubishi sales growth rate in August showed an upward trend (31% year-on-year increase in January-July and 36% year-on-year in August), which was also affected by the season (-37%). We believe that in August, Dongan Mitsubishi's seasonal decline in sales was in line with expectations. Overall sales were still showing a high growth trend. The headquarters maintained a growth rate of more than 1 times, Dongan Mitsubishi continued to increase steadily, and the overall development trend was good. Affected by seasonal factors, there was a month-on-month decline. Dongan Power engine sales are closely related to downstream vehicle customer sales. July and August are low sales seasons for traditional car companies, which directly caused Dongan Power engine sales in the third quarter to be slightly lower than at the beginning and end of the year (see Figure 1 and 2 below for the annual production and sales trend), but with the arrival of the peak automobile production and sales season in September and October, engine sales of our company and Dongan Mitsubishi are expected to improve month-on-month. The main customer, Changan, has a steady and bright performance. It is expected that the “Golden Nine Silver Ten” Changan Group will be one of Dongan Power's core customers. The first half of 2016 will have good supporting performance for both the headquarters and Dongan Mitsubishi. Among them, the main supporting models of the division are Auchan, and Auchan's components account for nearly 40% of the company's total engine sales; Dongan Mitsubishi's main supporting customers are CS35, CX70, and Onuo, and these three models account for more than 50% of Mitsubishi's total engine sales. Auchan is an important MPV plan for Changan. Production capacity or expansion in the second half of the year Auchan is one of Changan Onuo's MPV combo punches. It has a clear competitive advantage. It increased rapidly after launch at the end of 2015. It is Dongan Power's brightest source of performance in 16 years, with cumulative sales volume of 76,800 vehicles from January to August (accounting for 40% of the division's total support volume). Considering that there are currently few MPV models to choose from in China (mainly Wuling Hongguang and Baojun), which is difficult to meet market demand, Auchan, as the main model promoted by Changan MPV, has been highly recognized since its launch. Auchan's production capacity or expansion in the second half of the year will continue to contribute to the performance of Dongan Power Division. The CX70, CS35, and Onuo returned to the growth channel in the off-season. Changan's three main models, the CX70, CS35, and Onuo supplied by Dongan Mitsubishi, showed good gains in the off-season. Among them, the CX70 was a new model added by Changan in 2016. It began to increase in sales in April, and sales exceeded 10,000 in June. After a sharp decline in sales in July, it returned to the growth channel in August, with a year-on-month increase of 37.6%. Meanwhile, sales of Changan's two traditional models, the CS35 and Onuo, were also boosted against the market in August, achieving 24% and 64% month-on-month growth, respectively. We believe that with the completion of the CS35 2016 product upgrade and the stabilization of CX70 sales, and the “Golden Nine Silver Ten” peak season, Dongan Mitsubishi is likely to maintain a growth rate of more than 25% in the fourth quarter. Production and sales maintained a high growth rate in August. We are optimistic about annual performance, and maintain the “purchase” rating. We believe that Dongan Power's production and sales continued to grow at a high rate in August. Among them, the headquarters achieved customer upgrades through M series product replacement. The supporting volume is expected to double in 2016, and the second quarter results will turn losses into profits; Dongan Mitsubishi has further integrated into the Changan system, and sales of the main supporting models are steady, and the annual results are promising. Considering that the company's 6AT products may be produced in small batches next year, we predict that EPS in 16/17/18 will be 0.37/0.47/0.59 yuan, respectively, and the corresponding PE will be 34/27/22 yuan respectively, maintaining the “buy” rating.