The leading company for the three major domestic transmission, braking, and suspension system products is a product leader in the three major transmission, braking, and suspension systems in domestic automobile chassis assemblies. The main products are chassis and suspension systems, braking systems, transmission systems, wheel hub units, bearings, precision parts, etc. Among them, the transmission, braking, and suspension systems are all in a leading position. The company's business grew steadily: 2013 revenue increased 4.9% year over year; net profit increased 15.0% year over year (all adjusted). Sales volume of the company's main products, cross-shaft universal joint assemblies, increased 14.6% year over year to 65.459 million sets; braking system products increased 1.1% year over year to 6,522 million sets; and transmission shafts increased 8.9% year over year to 3.729 million units. The company began to switch to direct exports in 2012. The largest customer is University International Longistics INC, and its main customers are GM, Ford, etc.; other major customers include FAW-Haima and SAIC-GM-Wuling. We believe that with its advantages in transmission, braking, suspension, etc., and focusing on developing new products such as constant speed drive shafts and wheels, and continuously developing joint venture brands, the company's main business will continue to grow steadily in the future. The company announced on December 30, 2010 that it will not consider injecting Wanxiang electric vehicles into listed companies within the next two years, and reached negotiations with Wanxiang Group and Wanxiang Electric Vehicle. Wanxiang Group promised that when the company believes that the conditions for investing in Wanxiang electric vehicles are ripe and puts forward an investment motion, or when the industrialization of Wanxiang electric vehicles has been completed and the profit situation is normal and stable, the group will agree to transfer its shares of Wanxiang electric vehicles to the company. The company believes that it will consider injecting Wanxiang electric vehicles into listed companies only if the following three conditions are met: 1) Wanxiang electric vehicles are profitable; 2) the injection is beneficial to the company; and 3) management submits a motion. Currently, Wanxiang Electric Vehicle is still losing money. The company's management believes that it is currently impossible to increase the company's performance and has not filed a motion. It is expected that the injection of Wanxiang electric vehicles into listed companies will not be considered within the next two years, and Wanxiang electric vehicle profit will be a key factor in determining the timing of injection. There is no schedule for Fesco to be injected into listed companies. The company announced on April 3, 2014, that Wanxiang Group has acquired shares in Fisco in the US. Wanxiang Group has completed the transaction of Fisco in the US and is currently awaiting approval from the relevant departments in China. Previously, the company acquired battery manufacturer A123 in December 2012. After the acquisition of Fesco is completed, we have determined that production will be gradually resumed, and production will be expanded later. We believe that A123 and Fisco are expected to form a synergistic effect and gradually enhance Fesco's competitiveness in the field of electric vehicles. However, the company said that there is no timeline for Fesco to be injected into listed companies, so there is uncertainty. Investments in electric vehicle motor projects have been achieved in small-batch trial supply companies announced in April 2010 that they are investing in development projects focusing on new energy vehicle components, electric vehicle motors and motor controllers. Currently, the motor project is still in the experimental small-batch trial supply stage, and there is no formal batch supply yet. In 2013, small-batch trial sales of products to Wanxiang Electric Vehicles achieved sales of 2,228,000 yuan; the motor controller project is still in the R&D stage, with no sales. We believe that in the future, the company's electric vehicle motor and motor controller projects will still be actively developed. The motor project has already achieved small-batch trial supply, and it is expected that batch supply will gradually be achieved in the future. If batch supply is to be achieved, it is still necessary to track the industry and the situation of universal electric vehicles. Furthermore, if the company's parts can meet the standards, we judge that there is also a possibility that the company's parts will be supplied to Fesco. Profit forecasts and investment recommendations estimate EPS for 2014 and 2015 to be 0.42 yuan and 0.49 yuan respectively, and corresponding PE is 21 times and 18 times. Considering that the company has no plans to inject Wanxiang electric vehicles within the next two years, it is still necessary to continuously track the profit situation of Wanxiang electric vehicles and give them a “careful recommendation” rating for the first time. Risks suggest that sales in the automotive industry are not as good as expected; raw material costs have risen sharply; and orders are not as good as expected.