The performance was in line with expectations. The company disclosed the results for the first three quarters: revenue fell 11% year on year to 510 million yuan, benefiting from improved gross margin and cost control, net profit increased 14% year over year to 75 million yuan, and recorded an EPS of 0.33 yuan, in line with expectations. Among them, revenue fell 11% in 3Q2013, and net profit increased 36% year on year, further confirming that it had broken out of the trough. Volume contraction and profit increases, and new products, overseas markets, and refined management drive contrarian profit growth. The volume of gas-shielded welding for new products and the reduction in niche products are still the core reasons driving volume contraction and profit growth; domestic demand is still in a slump period and is still declining year on year, yet overseas markets continue to expand effectively; the three cost rates are still improving year over year, with 3Q falling 1.4ppt year on year. The profit quality is high, and there is plenty of cash. The company achieved a net operating cash flow of 150 million yuan in the 1st to 3rd quarter, which is twice the net profit. The receivables/inventory control was effective, and all continued to be superior to the listed companies in the same industry. As of the end of the 3rd quarter, the currency capital in hand was 1.14 billion yuan, no debt, and the net cash balance continued to rise. Currently, it is equivalent to 50% of the total market value. Trends Overseas markets still have great potential for growth. Independent brand machines such as Ruiling/Ryzen are still entering more developing markets. The recognition of the number one domestic welding machine brand has begun to be widely recognized overseas, and most overseas markets are also under a benign endogenous growth trend. By continuously introducing new products, profit indicators can maintain the current positive state. Following the market approval of various types of gas-shielded welding machines, the company's digital welding machines are ready to go, and automated products such as welding robots are still a potential source of interest. Overall, the new product chain brought about by continued high R&D investment (4 to 5% of revenue) helped maintain the company's profit indicators at a good level, with a net profit margin of 14.6% in the 1st to 3rd quarter, an improvement of 3.3% over the previous year. A rebound in domestic market demand, or an extended expansion, will bring significant stock price elasticity. The domestic market has been sluggish for two years. Currently, the distribution chain has not felt a recovery in demand, but industry integration continues to advance. As the base figure declines, it is more likely that domestic sales will achieve positive growth next year; the company's annual reports have explained the corporate strategy of integrating the industry and extending the industrial chain. Currently, there is plenty of book capital, and if there is epitaxial expansion, stock prices will also be clearly elastic. The profit forecast adjustments maintained the company's EPS for 2013-14 at 0.42 yuan and 0.53 yuan, respectively. The valuation and the proposed company's current stock price correspond to PE 24x and 19x, respectively. The company's profit quality is high, growth is sustainable, and the new product highlights are clear, recommendations are reiterated, and medium- to long-term investors are advised to actively intervene.