The PCCW announcement is in line with expectations. (1) Last week, the company issued a profit forecast announcement that the company expects a sharp decline in profit in 2011 for the year ended December 31, 2012. (2) the main reasons for the 12-year profit forecast for the whole year are the same as those in the medium term, one is the sharp drop in gross profit margin caused by the increase in the share of low-end goods, and the other is the increase in consumer spending caused by the initial investment in the automobile base: (3) this earnings warning announcement is in line with our forecast. We maintain a profit forecast of 8102 yuan for 12 years, a sharp drop of 62.3% compared with the same period last year. The parts of printing machine with high gross margin are very good. (1) due to the economic downturn and the earthquake in Japan, the share of low gross margin printers in the OA product structure increased significantly, resulting in a year-on-year drop in gross profit margin of 6.5 percentage points to 20.5% in the first half of 2012. (2) judging from the latest understanding, Japanese customers have gradually increased the demand for copies with high gross profit margin, and it is expected that the proportion of printed parts in 2013 will continue to increase, thus promoting the reversal of gross profit margin. We expect the gross profit margin to reverse to 25% in 2013.

The launch of auto industry products began in the second half of 2013. (1) the company completed the reopening of an automobile mold company in mid-2011 and the construction of a manufacturing base for automobile parts in March 2012, respectively. It is expected that the company will begin to receive revenue return from automobile moulds in mid-2013, but revenue from automobile parts will be expected to be profitable in 2014. (2) the company has passed the certificate of Ford and has carried out effective cooperation with Shengli and other companies. (3) entering the auto industry is a major strategy for the company. we expect to achieve results in the second half of 2013 and have a model in 2014.

The upper level is the investment level of "long-term investment". (1) the low gross margin of the restructured product structure and the new investment in the automobile industry will have a great impact on the company's financial performance in 2012, but with the change in demand for goods and the continuation of the automotive industry, 2012 will become an obvious turning point for the company; (2) our 13-year revenue is 3.5%, the premium gross profit is 5%, and the upper end profit is 122% to 2.02 yuan. The 14-year income of the upper tier is 2.8%, the gross profit margin of the upper tier is 5%, the profit margin of the upper tier is 86% to 309 million yuan, and the target price is 78% to 1.34 yuan. Corresponding to 1 times PB in 2013, the investment level has been changed from "neutral" to "long-term income".