In 2013, the company achieved operating income of 1,750 million yuan, an increase of 6.87% over the previous year; operating profit of 369 million yuan, an increase of 4.84% over the previous year; net profit attributable to the parent company of 282 million yuan, an increase of 4.8% over the previous year, and net profit after deduction of 268 million yuan, an increase of 6.04% over the previous year. Basic earnings per share are 0.2 yuan. 2013 profit distribution plan: It is proposed to distribute cash dividends of 0.80 yuan (tax included) for every 10 shares. The company is the absolute leader in the water supply market in Tianjin, and 80% of its revenue comes from Tianjin. The company's main business is sewage treatment, which accounts for 72% of revenue and gross profit. At the same time, the business also covers reclaimed water business, tap water business, hot and cold heating service business, and road toll business. Declining gross margin and asset impairment losses have undermined performance. During the reporting period, the company's overall gross margin fell 2.3 percentage points to 39.56%, mainly due to the relocation of four sewage treatment plants including Jizhuangzi in Tianjin at the end of 2012. Depreciation increased sharply in 2013, resulting in an 11.19% increase in operating costs over the same period last year. Meanwhile, during the reporting period, the company accrued asset impairment losses of 184.93 million yuan (the amount for the same period last year was zero), including impairment losses of RMB 11.32 million on assets of the Anguo urban water supply project, and RMB 7.17 million in bad debt losses on accounts receivable for the Qujing sewage treatment project. Company highlights: 1) In February 2014, the company signed a franchise agreement with the government, obtained 30-year franchise rights for four sewage treatment plants operated in Tianjin, and determined the guaranteed water volume and price adjustment mechanism. The signing of this agreement has effectively eliminated risks such as fluctuations in water intake in the Tianjin region and rising labor costs for raw materials, etc., on performance, laying the foundation for the healthy and sustainable development of the company's sewage treatment business; 2) Jiayuan Xingchuang, a wholly-owned subsidiary, began operating a centralized cooling and heating service project at the Tianjin Cultural Center in 2011. The Tianjin Cultural Center is located in the central area of the city. Coupled with the underground transportation hub system, the total construction area is over 900,000 square meters, including about 360,000 square meters of commercial shopping centers. With the commissioning of municipal construction facilities in cultural centers and the increase in the occupancy rate of merchants, we expect to generate revenue of 54 million yuan, 74 million yuan, and 78 million yuan in 2014-2016, respectively, according to agreed service prices. Profit forecast: The company's EPS for 2014-2016 is expected to be 0.24 yuan, 0.25 yuan, and 0.27 yuan respectively. Based on the latest closing price per share, the corresponding dynamic price-earnings ratios are 36 times, 34 times, and 32 times, respectively. Considering that the company's recent slow expansion from other locations is not conducive to performance growth, maintaining the company's investment rating as “neutral.” Risk warning: Offsite expansion is slow, and there is a risk that the market will be crowded out by competitors.