In the first three quarters of 2013, the company achieved operating income of 3.414 billion yuan, an increase of 46.07% over the same period last year; operating profit of 352 million yuan, an increase of 67.78% over the same period last year; net profit belonging to the owner of the parent company was 263 million yuan, an increase of 67.52% over the same period last year; and basic earnings per share was 0.36 yuan.

Performance still maintains high growth. The company's main business is engineering construction. During the reporting period, the company successively completed a number of municipal projects such as the eastern section of Chengdu second Ring Road and the first phase of Egret Ecological Wetland Park, while the north-south I trunk road project in Dazhou Jingkai District was progressing smoothly, driving the company's revenue and net profit to increase by 46.07% and 67.52% respectively in the first three quarters. The company's performance growth rate this year showed a trend of high before and low after, mainly due to the completion of the 765 million yuan Chengdu expressway overpass project signed at the end of September 2012 in May. Judging from the single-quarter results, the company completed revenue of 836 million yuan in the third quarter, down 16.52% from the same period last year and 47.98% from the previous year; realized gross profit of 17.43%, up 2.91% from the same period last year and 2.23% from the previous quarter; and realized net profit of 88.97 million yuan, up 23.09% from the same period last year, down 27.50% from the previous year. The company expects full-year performance growth of 10-40%, corresponding to a net profit of 2.86-364 million yuan.

The successful public offering of A shares will boost the company's future performance growth. The company successfully issued 76 million shares in July 2013, raising 700 million yuan to invest in the municipal road project (Section C) of the southern extension of Yuanhua Road. The construction period of the municipal road project of the southern extension of Yuanhua Road is from April 2012 to December 2013, with a total investment of 1.225 billion yuan. According to the company's estimate, the net profit of the project is about 309 million yuan. We believe that the smooth implementation of this public offering will make the company's future performance will enter a new acceleration period.

In the future, we will continue to benefit from the promotion of transportation construction. The company's main business is concentrated in Sichuan Province. According to the 12th five-year Plan of Sichuan Transportation, we strive to increase the traffic mileage of new highways to exceed 1000 km per year in the first three years of the 12th five-year Plan, and the Sichuan Provincial Transportation Department has proposed to ensure that the investment of 115 billion yuan will be completed in 2012. Sichuan transportation investment in 2013 will still maintain the growth trend of recent years, and the total investment scale will be about 120 billion yuan. The Chengdu Development and Reform Commission recently pointed out that in 2013, Chengdu's development and reform work focused on speeding up the construction of the national level, internationalizing the metropolitan economic circle, improving the "8-3" and "1-10" regional promotion mechanism circles, further strengthening regional traffic construction, strengthening the docking of expressways, expressways and other regional road networks, and speeding up the formation of an "one-hour" traffic circle in Chengdu Economic Zone and a "two-hour" traffic circle to Ganzi and Aba. Chengdu Tianfu New District Construction Planning Urban Expressway has a total length of 281 km, with 32 km completed by 2012. The later construction is worth looking forward to, and the company's future performance will continue to benefit from the promotion of traffic construction in Sichuan Province. The company expects to achieve 4.6 billion yuan in operating income and 430 million yuan in operating profit in 2013.

Profit forecast and valuation. It is estimated that the company's earnings per share from 2013 to 2014 will be 0.44 yuan and 0.50 yuan respectively, and based on the current stock price, the corresponding dynamic price-to-earnings ratio will be 12 times and 10 times respectively, maintaining the "overweight" investment rating.

Risk hints: the risk of intensified regional competition, the risk of insufficient newly signed contracts, and the risk of BT project payback.