1. Event Overview The company released its 2014 three-quarter report on the evening of October 26. The first three quarters achieved operating income of 438.13 million yuan, a year-on-year decrease of 18.60%, and net profit attributable to shareholders of listed companies of 53.46 million yuan, a year-on-year decrease of 13.71%. The performance was in line with expectations. According to the current progress of the company's various businesses, we carefully adjusted the 14-16 EPS to 0.35, 0.46, and 0.66 yuan, respectively, to maintain a “highly recommended” investment rating, and a reasonable valuation range of 19-23 yuan for 6 months. 2. Analysis and judgment. Confirmation of the pipe gallery project is coming to an end, dragging down the annual revenue company's BT bid for the Hunnan Xincheng integrated pipe gallery project in August 2012. The total planned investment is 1,075 million yuan. Revenue of 258 million yuan and 593 million yuan has been confirmed respectively in December and 13, and the remaining 225 million yuan is scheduled to be confirmed this year. Since the pipe gallery project, which accounted for the largest share of revenue in 13 years, was confirmed at the end, and considering capital recovery issues, the company did not consider accepting other municipal BT orders, so revenue for the first three quarters fell 18.61% from the same period last year. Regarding the capital recovery issue for the pipe gallery project, after negotiations with the government: (1) the remaining 3.5 kilometers, which are difficult for land acquisition and demolition, were handed over to the University Science and Technology City (Hunnan New Town) Management Committee; (2) the original plan “pay and use together, start settlement and enter the repurchase period” was changed to “separate payment and settlement, and enter the repurchase period separately” for the first and second phase of the project. It is expected that it will receive some settlement funds this year. The municipal government will continue to consider accepting other types of BT orders if the capital recovery issue is resolved. Intelligent mechanical equipment is recovering strongly, and electrical automation and integration have maintained rapid growth. Since this year, the company's original main business, intelligent mechanical equipment, especially tire molding machines, has been full of orders, and electrical automation and integration have continued to grow rapidly. The total revenue of intelligent machinery, equipment, electrical automation and integration in the first half of the year increased by 65.35% year-on-year. The optimization of product structure brought about a marked increase in gross margin. The company's overall gross profit margin was 33.99% in the first three quarters, up 6.41 percentage points from last year. The next three years will focus on returning to the main business of intelligent equipment and automation, and the digital factory will go to the next level. The company's energy-consuming industrial intelligent unit integration project was completed and put into operation in September this year. The fully automatic radial tire molding machine project will also enter the scheduled use state by the end of the year, and production capacity will be further released. In the future, the company will focus on returning to the main business of intelligent machinery equipment and automation, and further expanding the fields of digital factories and precision machinery (electric spindles and CNC machine tools). 3. Stock Price Catalysts and Risk Alerts Stock Price Catalysts: Breakthroughs have been achieved in extended acquisitions; the company undertakes new smart city and municipal construction orders. Risk warning: The company uses BT to accept government orders, and there is a risk of delays in repayment; currently the company is in a period of rapid expansion of scale and personnel, and there are certain management risks; the macroeconomic environment continues to be sluggish, and policy promotion falls short of expectations.