Key events in the report describe the release of the 2013 three-quarter report by Jinxi Axle. The main business results are as follows: operating income for the first three quarters was 1,666 billion yuan, a year-on-year decrease of 21.75%, and net profit attributable to shareholders of listed companies was 72 million yuan, a year-on-year decrease of 19.77%; earnings per share after complete dilution were 0.23 yuan. Incident review: Railway vehicle sales declined and tenders started late. Revenue fell 21.75% in the first three quarters, and tender order results are expected to be released in Q4. The delay in China Railway tenders led to a decline in sales of vehicles and vehicle accessories in January-September, and revenue for the first three quarters fell 21.75%. Vehicle tenders began in August, and the company received 1,500 C70E convertible cars, with a total amount of about 503 million yuan. At the same time, as one of the key suppliers of truck and bus axles, the company is expected to benefit from demand for supporting parts driven by vehicle delivery, and the tender results are expected to be released in Q4. The Q3 product structure continues the trend of the first half of the year. Vehicle sales led to structural improvements, and Q4 gross margin is expected to increase significantly. The Q3 gross profit margin was 11.0%, the same as the first half of the year; the reason is that sales of Q3 products continued the structure of the first half of the year, mainly focused on axles and spare parts, and the gross margin was relatively low. The increase in Q4 truck deliveries is expected to improve the product structure and increase the overall gross profit margin. Accounts receivable have increased dramatically. Along with vehicle deliveries and settlement by the Railway Corporation at the end of the year, some accounts are expected to be settled in the fourth quarter. The company's accounts receivable at the end of Q3 were 672 million, an increase of 80.34% over the end of 2012; the main reason was that the new accounts in '13 did not reach the agreed payment period. It is expected that some accounts will be settled in Q4, which will boost Q4 performance. On the other hand, the company has just completed a fixed increase in capital raising, and there is currently no financial pressure. The localization of EMUs is expected to achieve uniform standards in 2016; EMU standardization will benefit domestic parts manufacturers, especially EMU axles; as a leader in the axle industry, the company will benefit greatly. The unit price and gross margin of EMU axles are much higher than traditional rail transit axles. With the localization of EMU axles, the market space is huge. By the end of the 12th Five-Year Plan, the number of motor vehicles will exceed 2,000 trains. The huge demand for updates and some new demand in the 13th Five-Year Plan will boost the EMU axle market. Demand for EMU axles is strong, and it is expected that the company's product structure will be greatly improved; the unit price and gross margin of EMU axles are far higher than traditional rail transit axles, which will significantly increase the company's performance. The company's EPS is expected to be 0.4 and 0.53 in 13-14, respectively, and the corresponding current share price PE is 37 and 29 times, respectively; maintaining the “recommended rating”.