Shangchai Co., Ltd. is currently the only listed company in China that produces passenger car turbochargers. It has become a large national high-tech enterprise integrating development, design, manufacturing, and marketing, and is an undisputed technology leader in China's internal combustion engine industry. Based on the company's recent stock price trend in the secondary market, we believe that with the release of the company's future fund-raising and production capacity, the increase in sales of Shanghai Lishige turbochargers, and the release of LNG engines, the company's performance and valuation are expected to go hand in hand. In view of the actual situation of the company's future development, and taking into account the domestic and foreign macroeconomics, industry and company development conditions, we conservatively estimate the company's EPS of 0.27 yuan, 0.33 yuan and 0.41 yuan respectively in 2012-2014. According to the latest closing price calculation of 14.68 yuan, the corresponding dynamic PE is 54.37 times, 44.48 times, and 35.80 times. The recommended investment rating of the company is “increase in wealth.” Risk: Poor prosperity in the construction machinery industry affects the company's product demand; competition in the domestic diesel engine industry intensifies, and the market pressure facing the company continues to increase; CNPC plans to raise LNG gas supply prices, which will affect downstream demand and the number of LNG fueling stations, and corresponding demand for LNG engines will also decline; production and sales of Lindjung turbochargers and Lishige engines are not as good as expected