1. The incident company issued an announcement. Weichai Heavy Machinery (Weifang) Power Generation Equipment Co., Ltd., a wholly-owned subsidiary, plans to separately invest in joint ventures with natural persons Mr. Gu Daju and Mr. Le Zhong Yang. 2. Our analysis and judgment (1) Integrate sales channels to rapidly increase the market share of generator sets Weichai Power Generation Equipment and Gu Daju plan to establish Weichai Power Generation Equipment (Taizhou) Co., Ltd. in Taizhou City, Jiangsu Province, and Le Zhong Yang to establish Weichai Power Generation Equipment (Zhoushan) Co., Ltd. in Zhoushan City, Zhejiang Province. Weichai Power Equipment has invested 2.55 million yuan and holds 51% of the shares in the two joint ventures. Gu Dagu and Le Zhongyang have been engaged in the production and sale of generator sets and related products for many years, and have rich market experience and channel networks. Taking advantage of Gu Dajiu and Le Zhongyang's channel network advantages in the regional market, the company's generator set market share in the target region will increase rapidly. (2) Generating set space is large. Vigorously developing domestic and foreign power plant markets Weichai power generation equipment's small to medium power generator set business in target regions (Jiangsu, Zhejiang, etc.) will gradually be operated by corresponding joint ventures, while Weichai power generation equipment will focus on the design and development of generator set products, while concentrating on expanding the company's business in the communications, petroleum, mining, data center and other industries, as well as domestic and foreign high-power fuel and gas power plant markets. The market demand for generator sets exceeds that of marine medium speed engines. In 2012, the domestic diesel generator set market was about 15 billion yuan, and growth will continue to be relatively rapid in the next few years; in 2010, China's diesel generator set exports were about 1.2 billion US dollars. In recent years, Zhonggao Power, one of the company's competitors, Zhonggao Heavy Industries, has successively received orders for power generation equipment from overseas, totaling about 3 billion yuan. The large-scale heavy oil power plant project worth 350 million US dollars signed with Bangladesh in July 2012 brought 36 engines totaling 8,700 kilowatts to Zhonggao Heavy Industries in one go. The current executive general manager of the company is the former general manager of Zhonggao Heavy Industries. (3) At an inflection point in the company's performance, new business is about to start contributing to performance The shipping market is entering a recovery trend. In 2013, the number of new ship orders received by China's shipbuilding industry increased sharply by 242% over the same period last year. Inland waterway and coastal ships tend to save energy and reduce emissions, and market demand for medium speed diesel engines in the company's traditional inland waterway shipping business is steadily picking up; the prospects for generator sets and marine LNG power are promising. The company's strategic new product, a high-power medium-speed diesel engine, is equivalent to rebuilding a “new Weichai heavy engine”. Supporting demand in the fields of maritime surveillance ships, offshore vessels, and pelagic fishing vessels is rapidly increasing, and the prospects are promising. 3. Investment recommendations anticipate that the company's performance in 2014-2015 will achieve high growth. The 2013-2015 EPS is 0.20, 0.39, and 0.68 yuan, respectively, and the corresponding PE is 42, 22, and 12 times; maintaining the “recommended” rating. Risk warning: There is a risk that high-power diesel engines are progressing less than expected, and demand for inland waterway shipping will decline.