Key investment points: A complete range of axles, obvious advantages, and a significant increase in production capacity. The company has leading advantages in product variety, production scale, product quality and R&D. The company's axle products cover the domestic Ministry of Railways TB/T2945, the US AARM-101, and the European Union, India, South Korea and other technical standard truck axles, passenger axles, subway axles, light rail shafts, locomotive axles, etc., totaling about 300 varieties. At present, the 700-ton precision forging machine production line built by the company in Taiyuan headquarters has been put into use, which can release a production capacity of about 100,000 units/year, and production will gradually reach production this year. The revenue scale of the fund-raising project will reach 4.5 billion yuan/year after delivery. The company raised an additional 1,290 million yuan in capital (including issuance expenses), mainly for 2 projects and supplementary working capital. Among them, the Ma Steel-Jinxi axle project was launched as a joint venture between the company and Ma Steel Co., Ltd., and the Ma Steel-Jinxi axle project will build a production base with middle and high-end axles as a supplement, with an annual production capacity of 70,000 sets of axles. The main construction project for rail transit and high-end equipment manufacturing bases is Jinxi Axle and its subsidiaries, with a total investment of 1,743 billion yuan. After the implementation of the fund-raising project, the company's production capacity for products such as axles, wheel pairs, and pillow side frames all increased significantly. The revenue scale is expected to reach 4.5 billion yuan/year. Trucks were transformed and upgraded, and a breakthrough was achieved in exports. The company has newly developed the GHA 70 alcohol tanker, and has now formed a series of complete vehicle products including flat cars, convertible cars, hopper trucks, tankers, and special coal vehicles. Previously, the company mainly focused on 70-ton convertible cars with low gross margins. The company is undergoing transformation and upgrading, continuously launching new products, and gradually transforming into 80-ton trucks. In March 2013, the company signed a procurement contract with Pakistan for 200 flat cars and 300 tankers. This is the first time in more than 20 years that the company has produced trucks for export. An investment rating for increasing holdings is given. We expect the company's 2013-2015 EPS to be 0.34 yuan, 0.44 yuan, and 0.54 yuan, respectively. Based on the latest closing price of 14.15 yuan, the corresponding dynamic price-earnings ratios are 42 times, 32 times, and 27 times, respectively. Considering that the production capacity and profitability of the company's fund-raising projects have been greatly improved after delivery, we are optimistic about the company's growth and give it an investment rating of “increase in wealth.” Risk warning. The reform of the freight system is progressing too slowly; research and development of high-speed EMU axles fell short of expectations; competition in the axle and truck markets intensified after the marketization reform of the Railway General Administration.