Report Background: Bulletin 2013 a quarterly

2013 first quarter, the company achieved operating income of 450 million yuan, an increase of 27.5%. Net profit of 057 million yuan, an increase of 34.5%, EPS 0.22 million. 3 at the end than the beginning of the company other payables increased by 84% to reach 110 million yuan, mainly due to the company accrued expenses and sales agents margin increased. Company expects 2013 January to June, net profit rose 10% -40%. EPS 0.46-0.58 dollars.

2 Our analysis and judgment
(A) channel diversification, growth beyond the industry, share steadily. Since its listing, the constraints in a good incentive mechanism, through multi-channel expansion, robust revenue growth, market share continued to improve. 2013 January-February, warmed by the real estate transaction, the overall industry demand recovery, according to the data in the PRC, hood and stove industry sales were up 7% and 0.8%. Company hood and stove were achieved sales growth of 23.8% and 20.2% share, respectively increased by 1.5 and 1.3 percentage points, reaching 11.3% and 8.3% respectively.

(Two) optimized structure, good cost control, a high level of profitability steadily.
A quarter, the company's gross margin of 53.2%, up slightly by 0.3 percentage points, the sales rate of 30.2%, down 3.6 percentage points, the management fee of 8.5%, up one percentage point. Formation of the company in the first quarter consolidated net profit margin of 12.6%, representing an increase of 0.7 percentage points. 2013 electricity supplier company projected that there was a substantial growth channels, while the decline in raw material prices, but also help companies lower costs, expected high level of profitability is expected to steadily.

(Three) future, open a new three-year strategic plan. The past three years, the company achieved revenue CAGR of 28% net profit CAGR of 48.5%; multi-brand building and emerging channels are also laying the basic shape. 2013, the company revenue target 2.5 billion. Development goals while planning the next three years, will further emphasize quality improvement and sustainable development, achieve economies of scale CAGR of 30% target, three-scale re-doubled.

3. Investment advice
We believe that the company sufficient funds will help to further develop the brand, technology and channel advantages. From the current development trend of view, the company will continue with the main rival to widen the gap. The company expects 2013/2014 EPS 1.43 yuan, 1.89 yuan. Corresponds to the current stock price valuation in 2013 about 22 times, although other appliance company, the valuation is not cheap, considering the company's growth potential, we give a "recommended" rating.

4 Risk Warning: real estate sales recovery than expected.