The 2013 mid-year report results were in line with our expectations. The company announced the interim report. Operating revenue was 1.53 billion yuan, up -9.12% year on year, operating profit was 0.105 billion yuan, up 22.21% year on year, and net profit attributable to the parent company was 0.109 billion yuan, up 11.94% year on year. The fully diluted EPS was 0.13 yuan, which is in line with our expectations. The decline in the construction machinery boom has dragged down the company's engine growth rate. The company's share of construction machinery sales has gradually declined. Currently, it accounts for about 50%. The boom in the construction machinery industry declined in the first half of the year, causing the company to sell 0.0336 million engines, down 5.65% from the previous year. The rapid growth of Shanghai Lisho turbochargers and the increase in gross margin are jointly driving performance growth. In the first half of the year, a total of 0.253 million turbochargers were sold in Shanghai, which was about 4% higher than last year's sales volume, contributing 13.48 million to the company's investment income, compared to only 1.94 million in the same period last year. We expect to contribute 34.56 million in investment income for the full year. The investment income of the company's joint venture was only 9.14 million yuan in the first half of the year, mainly due to the loss of 8.67 million by the newly established Ryoshige Engine (50% share), so the business contributed -4.34 million in investment income to the company. The business is expected to reverse losses in the second half of the year. The company's gross margin for the first half of the year was 19.19%, up 0.97 percentage points from the same period last year, mainly due to the company's promotion of lean production and cost reduction. In the second half of the year, fund-raising projects and LNG engines were put into operation one after another, and profitability improved. The heavy engines, which the company cooperated with AVL in Austria, will be mass-produced in the 3rd quarter of 2013, mainly equipped with SAIC Iveco Hongyan, Valin and Foton. The company already has the capacity to produce 4L-12L LNG engines and is expected to share the rapid growth of the LNG industry. We believe that, backed by SAIC Motor Group, the capacity utilization rate will remain high, and the gross margin of commercial vehicles is high. The company's profitability is expected to gradually increase. Investment suggestions: maintain a “buy-A” investment rating, with a target price of 18.00 yuan for 12 months. Relying on the rapid development of the four businesses of turbochargers, diesel engines for vehicles, and LNG engines, we expect revenue growth rates of 9.4%, 58.6%, 36.2%, and 47.4% from 2013 to 2016, respectively, and net profit growth rates attributable to the parent company of 31.4%, 53.7%, 59.9%, and 49.9%, respectively. After full dilution, EPS was 0.31 yuan, 0.47 yuan, 0.76 yuan, and 1.14 yuan, respectively, maintaining a “buy-A” investment rating. The target price for 12 months was 18.00 yuan, corresponding 24 times the 2015 valuation. Risk warning: The incentive policy for riding diesel fell short of expectations; the turbocharger market was squeezed by new energy vehicles; automobile sales fell sharply; raw material prices rose sharply.