In 2013, the company achieved operating income of 1,380 million yuan, an increase of 11.63%; operating profit of 219 million yuan, an increase of 8.08%; net profit attributable to the parent company of 192 million yuan, a year-on-year decrease of 9.37%; and achieved earnings per share of 0.67 yuan. Profit distribution plan: 1.50 yuan (tax included) for every 10 shares transferred to 8 additional shares. According to the 2014 first quarter results forecast, the company achieved net profit attributable to shareholders of listed companies of 5.77 million yuan to 7.21 million yuan, an increase of 20% to 50% over the previous year. The scale of the low-nitrogen combustion business reached a new high. The “12th Five-Year Plan” period was the peak of denitrification transformation in China. As a leading enterprise in front-end low-nitrogen transformation equipment, the company fully benefited, and the compound growth rate of business scale reached 94% in 2011-2013. During the reporting period, the company sold 119 sets of low-nitrogen products, an increase of 50 sets over the previous year, but due to market competition, the unit price of the product fell 12.70% year on year. The scale of business revenue reached 929 million yuan, an increase of 50.57% over the previous year. We expect that in 2014-2016, China's thermal power denitrification and new construction machinery combination will reach 537 million kilowatts. Based on low nitrogen combustion costs of 40 yuan/KW, the corresponding market space is 21.5 billion yuan, which is about 8.1 billion yuan higher than the 2011-2013 market space, and downstream demand will continue to be released. This can be confirmed by the performance forecast for the first quarter of this year. We believe that the low-nitrogen combustion business will remain the company's main source of revenue for the next three years. The gross margin of the main business declined, and sales expenses increased sharply, eating up profits. Affected by market competition, the prices of the company's plasma products and low-nitrogen combustion products declined, leading to a decrease of 8.96 percentage points and 2.54 percentage points, respectively. Comprehensive gross margin fell 3.69 percentage points year on year, and profitability weakened. In this period, the company increased market development and took the initiative to further improve products and projects that had problems and defects in actual operation, increasing sales expenses by 34.28 million yuan year-on-year, leading to a year-on-year decline in net profit. The company continues to improve products through experience summary, and it is expected that subsequent after-sales service costs will not put much pressure on sales costs. The Group's internal demand is strong, and energy-saving transformation is the focus of development. The majority shareholder of the company is a subsidiary of Guodian Group. The contract amount for routine related transactions is expected to reach 1.1 billion yuan in 2014, an increase of about 400 million yuan over the amount actually incurred last year. Of this, the amount of waste heat recovery contracts is as high as 500 million yuan, six times the company's waste heat business revenue last year. We believe that demand for waste heat transformation is directly linked to the profit situation of thermal power plants. The overall profit of power plants improved last year. In the future, under a major trend where coal prices are unlikely to drop drastically and unit power generation hours are declining, power plants are pursuing increased demand for comprehensive efficiency. It is expected that the company's energy saving business will usher in rapid development, and the scale is expected to reach 2-3 billion yuan this year. Profit forecast and rating: The company's 2014-2016 EPS is estimated to be 0.90 yuan, 1.06 yuan, and 1.19 yuan, respectively. Based on the latest closing price of 21.67 yuan, the corresponding dynamic PE is 24 times, 20 times, and 18 times, respectively. In the short term, the high transfer plan has a certain effect on the company's valuation. In the long run, the company's energy saving business is highly dependent on the group's internal dependence, and there is some uncertainty. Maintain the company's “neutral” investment rating. Risk warning: The progress of denitrification transformation is lower than expected; there is uncertainty about orders within the group.