With the acquisition of Xinguang for environmental protection, the company has accelerated its layout in the field of rail transit. The company announced that the outstanding orders of Xinguang Environmental Protection exceeded 150 million yuan, and the promised performance in the next three years would have a compound growth rate of 76% in the next three years, with high certainty of rapid growth. The acquisition of Xinguang Environmental Protection not only means that the company will enter into new areas of sound barrier to reduce its dependence on wind power, but also has a strong driving effect on the company's existing business. In addition, more importantly, we believe that the acquisition of Xinguang Environmental Protection is a major signal for the company to speed up the layout of the rail transit sector, and the company's strategy of tilting its main business to the rail transit sector is becoming increasingly clear.

The trend of wind power recovery is clear, and the company's performance in 2014 will benefit. The investment enthusiasm of wind power operators increased significantly in 2014, and Guotai Junan's new energy research group expects an increase of about 50% in the new installation plan. The recovery of manufacturers will lag behind operators, and the order of benefit for manufacturers is from machine manufacturing to parts manufacturing to raw material manufacturing. Company orders are now growing significantly compared with the same period last year, and the increase in newly signed orders will be reflected in 2014 results.

Maintain the overweight rating. We maintain the 2014-2016 profit forecast EPS of 0.18 yuan / 0.25 yuan / 0.32 yuan respectively (considering the acquisition of Xinguang Environmental Protection is 0.19 yuan / 0.28 yuan / 0.34 yuan respectively), maintain the target price of 10.45 yuan unchanged, maintain the "overweight" rating.

Risk hint: rail transit market development is not as expected; gross profit margin of post-processed products decreased.