Key events in the report describe the events of Changjiang Investment released its 2013 quarterly report today. During the reporting period, the company achieved operating income of 403 million yuan, an increase of 115.98% over the previous year. The operating cost was 354 million yuan, an increase of 147.8% over the previous year. The company achieved net profit attributable to the company in the first quarter of 12 million yuan, a year-on-year decrease of 4.4%, and basic EPS of 0.0387 yuan, compared to 0.0405 yuan in the same period last year. Incident comment The continued expansion of the logistics business is the main reason for revenue growth: judging from the company's recent projects, the contribution to revenue growth in the first quarter was still due to the continued growth of the logistics business. Low margin logistics business volume reduces overall gross profit level: Looking at the company's business structure and the seasonality of its costs, we believe that the main reason for the rapid decline in the company's gross margin is due to the rapid expansion of logistics business. As can be seen, the company's engineering project business is characterized by a seasonally low gross margin in the first half of the year. If project settlement increases, gross profit can be lowered. However, from the perspective of improving the structure of the business sector, 1) The reason the company's gross margin declined by nearly 10 points this year is not due to a sector where the share of the business will gradually decrease; it should be mainly due to the drastic expansion of a certain low-margin business. 2) Project settlement generally appeared in the second half of the year, followed by the absolute low volume of the semi-annual project settlement business, which could not support 100% revenue growth. Therefore, we believe that the business that is in line with this business structure improvement is the logistics business. Three fees remained high, and government subsidies increased performance: overall comparison, the company's median expense ratio returned to a high level, and was higher than that of peers over the same period for a long time. The company still received about 5 million yuan in various government subsidies this quarter, receiving a total of 3,585 million yuan in non-recurring profit and loss, increasing its performance by 0.0117 yuan per share. The company achieved net profit attributable to the company in the first quarter of 2013 of 11.89 million yuan, a year-on-year decrease of 4%, and basic EPS of 0.0387 yuan, compared to 0.0405 yuan in the same period last year. The Land Communications Center is expected to continue to improve. Overvaluation is an obstacle, and “careful recommendation” is maintained: after several years of nurturing, the Land Communications Center turned a loss into a profit after expanding its business volume last year, and continued to achieve high growth in the first quarter of this year. We believe that the increase in the penetration rate of land transportation centers has a certain inertia. In the future, this business is expected to continue to grow, bringing more returns to the company, and in 2013, the company will also expand its business results and launch a multi-city distribution model and 56 cloud platforms. However, the current high growth has certain low base factors, and as far as the company's current valuation level (40X-50X range) is concerned, resistance is obvious. We maintain our “prudent recommendation” rating and expect the company's EPS for 2013-2015 to be 0.125, 0.138, and 0.146 yuan.