Highlights of the report describe the announcement of Lianyungang's 2013 quarterly report. The company achieved revenue of 1,118 billion yuan in the first three quarters, down 8.57% year on year, gross margin down 0.14 percentage points to 28.19% year on year, net profit attributable to the parent company was 143 million, up 4.76% year on year, and EPS was 0.18 yuan. In the third quarter, the company's revenue fell 15.37% year on year to 351 million, gross margin fell 3.30 percentage points year on year to 24.88%, net profit attributable to the parent company fell 6.14% year on year to 45 million yuan, and EPS was 0.055 yuan. Incident review The main business performance declined in Q3, and taxes and COSCO Shipping's liquidation made up for the profit gap. In the third quarter, the company's revenue fell 15.37% year on year, and gross margin fell 3.30 percentage points year on year. In the end, net profit fell 6.14% year on year in the third quarter, a significant drop from the 10.58% growth rate in the first half of the year. The reasons why net profit performance in the third quarter was superior to gross profit (-25.29%) is that since October of last year, the company's main business was changed from sales tax to value-added tax, and sales tax decreased by 94.95% year on year; 2) the operation of COSCO Shipping Liquidation and other investment companies improved in the 3rd quarter, and investment income surged 97.66% year on year; 3) income tax fell 71.63% year on year. EPS for the 1st to 3rd quarter was 0.055 yuan, 0.066 yuan, and 0.055 yuan respectively. The decline in revenue increased in the first three quarters, and profit growth declined slightly. The company's revenue and costs for the first three quarters fell 8.57% and 8.39%, respectively, and gross margin fell slightly by 0.14 percentage points. Gross profit fell by 31 million yuan year on year, but net profit still increased by 0.06 million (4.76%) year on year. The growth rate of container throughput at the New Oriental Container Terminal is rising. In January-September, the container throughput of the New Oriental Container Terminal in which the company participated increased 11.64% year on year, which was basically the same as 11.05% in the first half of the year, but it was faster than the overall growth rate of 7.5% in the country. Among them, the container throughput of New Oriental Containers rose 13.56% year on year in the 3rd quarter. Maintain a “Cautious Recommendation” rating. The company's future fundamental highlights mainly come from: 1) the development of the port industry in the hinterland; 2) the expansion of liquefied chemicals handling business; and 3) the increase in cargo volume brought about by the China-Japan-Korea Free Trade Zone. We maintain our 2013-2015 EPS forecasts of 0.21 yuan, 0.26 yuan, and 0.28 yuan, respectively, corresponding PE of 16.53 times, 13.39 times, and 12.65 times, and maintain the “careful recommendation” rating for the company.