Incident: The company announced its 2013 three-quarter report. In the first three quarters, the company achieved operating income of 180 million yuan, a year-on-year decrease of 13.09%; realized net profit attributable to shareholders of listed companies of 68 million yuan, a year-on-year decrease of 7.09%; and basic earnings per share of 0.62 yuan. Opinion: 1. Domestic market sales were lower than expected, and the company's performance declined slightly year on year. During the reporting period, the company achieved operating income of 180 million yuan, a year-on-year decrease of 13.09%; net profit attributable to shareholders of listed companies was 68 million yuan, a year-on-year decrease of 7.09%. Among them, the third quarter achieved operating income of 43 million yuan in a single quarter, a year-on-year decrease of 37.50%; net profit attributable to shareholders of listed companies was 0.24 million yuan, a year-on-year decrease of 3.23%. The company's operating income and net profit declined slightly, mainly due to changes in the company's domestic market product structure. On the one hand, the company's chip sales have declined; on the other hand, the subsidiary Fugen Smart's participation in the State Grid bidding situation is not ideal. We expect that in the next phase, the company will increase its domestic marketing efforts and stabilize its share in the domestic market. The number of smart meter tenders set by the State Grid Corporation in early 2013 was 55 million, and the number of smart meter tenders in three batches this year has already exceeded 53 million. With the release of new demand for agricultural grid transformation and the release of demand for the renewal of existing smart meters, the total demand will exceed the plan at the beginning of the year. We expect the number of smart meter tenders to reach 65 million this year, and the company's market share is expected to reach 10%. 2. The company continues to increase investment in research and development. New products will gradually be launched. During the reporting period, the company's cost rate for the period will increase by 3.54 percentage points to 20.49% over the same period last year. The main reason for the sharp increase in management expenses is that the company has increased its investment in R&D, and R&D expenses will continue to increase. The company's advantage is that it has the ability to design the underlying chip and can be customized according to customer needs. The company's PL4000 series power line carrier chips enhance PLC communication functions and add wireless communication functions. They are automatically compatible with North American and European PLC communication standards, and meet the market demand for domestic and foreign power line carrier chips. The company designed single-phase and three-phase electric meters using PL5000 series chips for the Eastern European market; for the African market, it designed a comprehensive management system and a call center providing customer service and recharge services. We expect that with the gradual introduction of the company's new products to the market and the scale effect, the company's period cost ratio will return to normal levels. 3. The line loss reduction project in Ghana is progressing smoothly. The BOT model is highly replicable. The company's loss reduction project in Ghana progressed smoothly. As of September 30, 2013, the loss reduction project had completed the installation of 6,9057 electricity meters. The installation progress was significantly faster than in the second quarter, and 15% of the project installation tasks have now been completed. The company has strengthened technical and installation training for construction personnel, and continuously improved the construction quality and level of personnel. The electricity meter installation capacity has reached 300-600 meters per day. We expect that the number of meters installed by the company for line loss reduction projects will reach 100,000 yuan this year, laying a solid foundation for the goal of completing 450,000 yuan by the end of next year. If the company successfully implements this project, it is expected that the model will be replicated in other regions of Ghana in the future, and there is plenty of room for growth. In addition, the company's two distribution network projects in Ghana are operating normally. The distribution network line expansion project in the central and western provinces is expected to complete construction tasks by the end of 2013. The distribution network line expansion projects in Ashanti West, Ashanti East, East and Walter Districts in Ghana are currently still in the process of procurement and transportation, and construction tasks are expected to be completed in the first half of 2014. Conclusion: On the one hand, the company is strengthening its domestic marketing efforts and consolidating market share, and on the other hand, actively expanding overseas business. Ghana's line loss reduction project is progressing smoothly, and it has established links with many African countries, so there is plenty of room for future expansion. We expect the company's revenue from 2013 to 2015 to be 281 million yuan, 373 million yuan 482 million yuan, net profit of 84 million yuan, 112 million yuan and 145 million yuan respectively, with earnings per share of 0.77 yuan, 1.02 yuan and 1.32 yuan respectively. The corresponding PE is 34 times, 25 times and 19 times, maintaining the “recommended” investment rating. Risk warning: The progress of Ghana's line loss reduction project has fallen short of expectations.