Performance Overview Yueda Investment achieved revenue of 2.11 billion yuan in 13 years, a year-on-year decrease of 9.1%; realized net profit attributable to the parent company of 1.29 billion yuan, an increase of 16.2% over the previous year; net profit after deducting 1.25 billion yuan, an increase of 13.9% over the previous year. EPS of 1.52 yuan was achieved, which is basically in line with expectations. The profits of management analysis companies are growing rapidly, and the sharp increase in government subsidy revenue is the main reason. The company's revenue fell 9.1% in 2013. The year-on-year decline in the company's revenue was mainly affected by falling coal prices and falling demand. The company's net profit to the mother increased by 13.9% in '13. The growth rate was higher than the revenue growth rate. The main reason was that the company received about 100 million yuan in government subsidies. In addition, interest accrued on other accounts receivable from the Middle East Wind Motor Company about 23 million yuan, which increased EPS by about 0.14 yuan in total. Gross profit margins have declined, but financial expenses have declined markedly. Affected by the slump in the high-margin coal business and the decline in the expressway business, the company's gross margin for the fourth quarter was 25.3%, down 2.2 percentage points from the previous quarter. However, the good news is that the company's efforts to reduce losses and increase profits have achieved good results. The company's financial expenses in '13 were 200 million yuan, a decrease of about 80 million yuan compared to the same period last year. In addition, the company's sales expenses and management expenses have also increased reasonably. The total expenses for the 3-year period were 480 million yuan, a decrease of about 30 million yuan compared to the same period last year. DYK's profit grew rapidly in 13 years, and is expected to continue to grow rapidly in the next two years. DYK achieved revenue of 53.78 billion yuan and net profit of 4.16 billion yuan in 2013, an increase of 15.7% over the previous year. The equity profit contributed to the company was 1.04 billion yuan, accounting for about 81% of the company's net profit to mother. The total sales volume of DYK in 2013 was 547,000 units, up 14% year on year, and the growth rate for both cars and SUVs was 14%. The company's sales structure has also improved. The cumulative sales volume of SUVs in 2013 reached 24.4%, an increase of 0.5 percentage points over the previous three quarters, which is the same as in 2012. In terms of new models, the company will launch the K3 hatchback in the first half of this year, launch the K4 in the second half of the year, and launch another small SUV in early 2005. DYK's performance is expected to continue to grow rapidly in the next two years. The power plant business has improved markedly, contributing more return on investment. In June '13, the company transferred 20% of Chenjiagang Electric Power Company's shares and increased its capital. In 2013, the Chenjiagang Power Plant achieved net profit of 267 million yuan and contributed 53.49 million yuan in equity income. We expect that power plant operations have improved and will continue to contribute steadily to performance in the future. Losses in the tractor and textile business have declined markedly and are expected to continue to improve, roads are expected to resume growth, and coal is likely to continue to slump. The tractor business lost 19.23 million yuan in 13 years, a sharp decrease of 48.7% over the previous year. The textile business lost 100 million yuan for the year, a decrease of 22.1% year-on-year. The road business achieved net profit of 1.69 billion yuan, a year-on-year decrease of 13.4%. The coal business achieved net profit of 15.65 million yuan in 2013, a year-on-year decrease of 70.9% due to continued low coal prices and sluggish demand. We believe that the tractor and textile business is expected to continue to improve, the road business is expected to resume growth this year as factors such as diversion and station removal are reduced, and the coal business may still be sluggish. Acquired 60% of Carter's shares and got involved in the biodiesel sector. Additionally, the company announced that its wholly-owned subsidiary Yueda New Materials Co., Ltd. plans to acquire 50% of Carter's shares and increase its capital in a targeted manner. Eventually, the company will hold 60% of its shares. Carter Company is mainly engaged in bioplasticizers, biodiesel and other businesses. In 2013, it achieved revenue of 420 million yuan and a loss of 8.75 million yuan (profit of 4.27 million yuan in 12 years). The company is currently implementing 200,000 tons of biodiesel (originally 100,000 tons) capacity expansion technology improvement project, which is expected to be put into operation by the end of July '14. Carter promised to achieve net profit of not less than 40 million yuan and 60 million yuan respectively in 14 and 15 years, contributed equity income of not less than 24 million yuan and 36 million yuan, respectively, and increase EPS by 0.03 yuan and 0.04 yuan. Profit adjustment We slightly adjusted the company's profit forecast. We expect net profit attributable to the parent company to be 14.1 billion yuan, 17.7 billion yuan, and 1.98 billion yuan respectively in 14-16, up 8.7%, 26.0%, and 11.8% year-on-year, respectively. The corresponding EPS is 1.65, 2.08, and 2.33 yuan, respectively. The current stock price of the investment proposal company is less than 7 times the 14-year PE, and the valuation level is already clearly low. With the successive commissioning of the K3 hatchback, K4, and small SUVs in early 2015, DYK's performance will continue to grow rapidly. Coupled with the gradual reduction in losses in the company's headquarters business, the company's overall performance has good growth potential, and the biodiesel business is expected to increase the company's valuation. We maintain the company's “buy” rating and suggest that the configuration can be increased as appropriate at this stage.