Event description Changjiang Investment released its 2012 annual report today. During the reporting period, the company achieved revenue of 1,386 billion yuan, an increase of 35.19% over the previous year; of this, revenue for the fourth quarter was 600 million yuan, an increase of 100.14% over the previous year and an increase of 102.85% over the previous year. The annual operating cost was 1,179 billion yuan, an increase of 34.75%; of this, the fourth quarter expenditure operating cost was 513 million yuan, up 97.96% year on year and 96.06% month on month. The company achieved net profit attributable to the company of 32.82 million yuan in 2012, an increase of 76.38% over the previous year, and achieved basic EPS of 0.107 yuan for the whole year and 0.06 yuan for the same period last year; of these, net profit attributable to the parent company in the fourth quarter was 8.72 million yuan, up 263.25% year on year, up 18.35% month on month, and the EPS for the single quarter was 0.028 yuan. Incident review The settlement of the engineering business and the volume of the Land Transport Center were the two main reasons for the increase in revenue: the year-on-year increase in revenue was mainly due to the confirmation of BT project revenue of 321 million yuan in the fourth quarter according to completion progress during the reporting period. In addition, the operating revenue of the subsidiary Shanghai Land Freight Trading Center Co., Ltd. increased by 198 million yuan over the same period last year. However, due to the impact of the downturn in the international freight forwarding industry, the subsidiary Shanghai Changfa International Freight Co., Ltd., saw a year-on-year decline in operating income of 121 million yuan, which offset part of the increase in revenue. Project settlement improved the overall gross profit margin, and logistics business costs became higher: after the company's subsidiary Land Communications Center expanded its business, while revenue increased 145% year over year, costs also rose sharply by 178% year over year. However, the gross margin of project settlement is relatively high, raising the overall gross margin level. The three-fee control was strong, and government subsidies and litigation compensation increased performance: sales expenses increased 1.33% year-on-year during the reporting period; management expenses increased 10.82% year-on-year; and the amount of financial expenses incurred was -28.78 million yuan, down from -22.39 million yuan last year, demonstrating the company's ability to control the three fees. Judging from the situation of subsidiaries, Onshore Center and Xile Road Engineering Management Company became the two departments with the most obvious increase in the company's net profit. The company received a total of 32 million yuan in government subsidies and compensation from Everbright Bank this year, increasing its performance by about 0.046 yuan. The Land Communications Center is expected to continue to grow, diversified businesses will increase focus, and maintain “careful recommendations”: after several years of cultivation, the Land Communications Center's business volume this year turned a loss into a profit. We believe that with the increase in the penetration rate of the Land Communications Center, there is a certain inertia, the business is expected to continue to grow in the future, bringing more returns to the company, and the company will also expand its business results in 2013 and launch a multi-city distribution model and 56 cloud platforms. In addition, the company's basic BT projects, meteorological technology, and financial sectors have also achieved results one after another. Diversification will also add more interest to the company's business. We maintain our “careful recommendation” rating. We expect the company's EPS in 2013-2015 to be 0.125, 0.138, and 0.146 yuan, and the corresponding PE is 45, 40, and 39 times.