1. Net profit decreased by 43.57% year on year in 2013. Data shows that in 2013, the company achieved operating income of 5.768 billion yuan, a year-on-year decrease of 11.35%; realized operating profit of 201 million yuan, a year-on-year decrease of 35.87%; realized net profit attributable to shareholders of listed companies of 170 million yuan, a year-on-year decrease of 43.57%; realized earnings per share of 0.30 yuan, in line with our previous expectations; and the dividend plan was 0.60 yuan in cash for every 10 shares (tax included). 2. The decline in profit is due to falling urea prices. The company is a leading domestic gas urea company. In 2013, it produced 823,300 tons of urea, and also produced 256,000 tons of automotive urea, 3,389.23 tons of melamine, and 1783 million tons of compound fertilizer. The main source of the company's revenue and profit is urea. In 2013, the domestic urea market continued to be sluggish. The average price was only 1,836 yuan/ton, down 15.34% from the average price in 2012. Although the company has increased investment in automotive urea, the current scale of automotive urea has not yet reached a large scale, so the company's performance is affected by the decline in traditional urea prices. Domestic urea export tariffs were drastically reduced in 2014, and we expect domestic exports to increase, which can alleviate the current situation of excessive domestic urea production capacity to a certain extent. 3. The prospects for automotive urea are worth looking forward to. The company has now built and put into operation the first domestic production line of 600,000 tons of nitrogen oxide reducing agent (that is, automotive urea solution) with patented technology. After purification, it is equivalent to a production capacity of about 200,000 tons of automotive urea. Data show that in 2013, the company sold a small amount of automotive urea at 25,600 tons, and the gross margin was 2.4 percentage points higher than traditional urea. We believe that with the expansion of the scale of automotive urea, the company's gross margin is expected to increase steadily. Automotive urea is mainly used for exhaust treatment of diesel vehicles. As environmental requirements continue to increase, the market space for automotive urea will expand accordingly. We are optimistic about the long-term prospects of this market. The filling of automotive urea needs to rely on gas stations, and the company's final controller is Sinopec. The company is expected to rely on Sinopec's gas stations to sell automotive urea, so there is plenty of room for imagination. 4. Compound fertilizer production capacity is expected to increase; the LNG subsidiary has good prospects. The company's “Synthetic Ammonia and Urea Plant Environmental and Safety Hazard Management Relocation and Renovation Project” is expected to reach production in mid-2014. At that time, the company's compound fertilizer production capacity will increase from 270,000 tons to 450,000 tons. The increase in compound fertilizer production capacity is expected to become the main source of the company's performance growth in the past two years. Relying on the majority shareholder background, the company has set up an LNG subsidiary, and is expected to enter a harvest period in the next two years. As an important primary energy source, the application field of natural gas continues to expand. Coupled with the continuous maturity of storage and transportation technology, the prospects for the LNG business are worth looking forward to. 5. Profit forecast and valuation We assume that the company's various businesses are progressing steadily and that urea prices do not fluctuate significantly. The company's earnings per share for 2014-2016 are expected to be 0.39 yuan, 0.60 yuan, and 0.84 yuan respectively. Based on yesterday's closing price, the corresponding dynamic price-earnings ratios are 21 times, 14 times, and 10, respectively. We are optimistic about the benefits brought to the company by increasing compound fertilizer production capacity and promoting automotive urea, maintaining the company's “increased holdings” rating. 6. Risk indicates policy risk, and projects under construction do not meet expectations.