Incident: The company released the 2013 semi-annual report performance forecast, and achieved net profit of 2018 million yuan to 23.21 million yuan in the first half of the year, an increase of 0% to 15% over the previous year. Furthermore, the impact of non-recurring profit and loss on the first half of the year's results was only 1.1 million yuan. Comment: 1. Compared with the first quarter results, the second quarter performance growth rate declined. The company's performance in the first quarter was relatively good. Operating revenue increased 34% year on year, and net profit increased 26.9% year on year. According to the 2013 interim performance forecast, net profit for the second quarter was 14.69 million yuan to 17.72 million yuan, a year-on-year growth rate of 0% to 20%. Compared to the first quarter, the performance growth rate has declined. 2. The company's orders in the railway sector grew rapidly, and the company's box-type substation sales in the railway sector accounted for about 60% of this business. Last year, due to the slow construction of high-speed rail, the box-conversion business declined. Since the country restarted railway construction in November of last year, railway box conversion orders obtained by the company in the early stages have begun to be delivered one after another. The subsidiary Wuchang Electronic Control is the company's main platform for obtaining railway orders. As of May this year, the subsidiary's orders reached 97 million yuan. If the railway sector maintains this growth rate in the second half of the year, the company's performance this year will exceed expectations. 3. Profit forecast and investment advice Currently, we maintain our previous profit forecast. We expect earnings per share of $0.40, $0.44, and $0.49 for 2013, 2014 and 2015, respectively. The PE corresponding to the current stock price in 2013, 2014, and 2015 is 19 times, 17 times, and 15 times, respectively. Currently, the valuation is at a low level. We will determine whether to raise the rating based on subsequent circumstances and maintain the “Prudent Recommendation” investment rating for the time being.