Ruiling Co., Ltd. announced its quarterly report, achieving operating income of 193 million yuan, a year-on-year increase of 23.62%, profit of 36.157 million yuan, and a simultaneous increase of 39.21%; net profit attributable to common shareholders of listed companies was 306.947 million yuan, up 36.37% from the same period last year. Better than market expectations! Comment: 1. Review of the 2013 Annual Report: Proposing the development direction of automated welding 2. Benefiting from the growth of new products, the increase in revenue and gross margin in the first quarter was the main reason why the performance exceeded expectations. 3. The subsidiary fulfilled its acquisition performance promise and compensation, and Ruiling received another 15% of the shares in Zhuhai. 4. Establishing a welding industry fund to expand the welding industry chain. M&A of industry funds is also an innovation. 5. The valuation is significantly lower than that of automation equipment companies, and for the first time, a highly recommended rating was given. We expect 2014-2016 EPS to be 0.52, 0.63, and 0.76 yuan, with a compound growth rate of 20-25%, and dynamic PE 21 times in 2014. It is worth mentioning that the company currently has a market value of 2.5 billion yuan and monetary capital of 1 billion yuan. If 800 million yuan of idle capital is deducted, dynamic PE is less than 15 times and PB 1.14 times. The company has good cash flow, a steady business style, and its current market value is underestimated. After the correction, it is recommended to pay active attention. 6. Risk factors: raw material prices are rising, investment growth is slowing down, and executive holdings are declining.