Investment points: The physical and optoelectronic properties of sapphire determine that it is bound to shine in the consumer electronics field. Sapphire is a monocrystalline material. It not only has high hardness, but also has advantages such as good thermal conductivity and high dielectric constant, and has begun to be widely used in smart phone home buttons, camera covers, smart watch screen protectors, sensor protective covers, etc. Furthermore, we judge that the application of sapphire in smartphone screen covers will also become popular, and demand will explode. Apple's layout patent solves the fragility problem of the current application of sapphire screens, and it is likely that sapphire screens will be used in the future. The patent that Apple has applied for shows that coating is used to reduce the impact of surface defects, making the sapphire screen less sensitive to the defect rate, which is equivalent to greatly improving the yield of sapphire. However, methods such as surface prestress coating have improved sapphire drop reliability, and two-stage pin joint mechanical assembly has replaced previous adhesives, providing better impact resistance. The conditions for large-scale application of sapphire in mobile phone screens have been met: in terms of cost, industry-leading manufacturer Ored has innovatively combined heat exchange with the bubble method to reduce the cost of a sapphire cover for a 5-inch mobile phone screen to 15 to 20 US dollars, reaching a sweet point in the price of large-scale applications. On Apple's side, there are five major patent layouts. The new patent overcomes the two major bottlenecks of sapphire's low yield and fragility. In terms of the industrial chain, Ored, Lance, Bourne and other manufacturers are competing to expand sapphire production capacity. The company's vertically integrated production is the biggest beneficiary of the explosion in industry demand. The company's business segment covers upstream equipment, midstream crystal growth, downstream crystal processing, and integrated management in the industrial chain. It has the advantages of strong product development capabilities and fast product iteration. The company is a well-deserved leader in the global sapphire industry, and is at the world's leading level in terms of production capacity scale and low production costs. With the explosion of demand for sapphire in consumer electronics fields such as smart wearables and smart phones, the company will definitely benefit the most. Square ingots are mass-produced, and the cost has been drastically reduced. After years of independent research, the company combined the principles of the heat exchange method to make technical improvements to the original cold shoulder microlifting method (improved foam method), and successfully produced a single crystal of square sapphire. Compared with the original pear-shaped ingots, square ingots can greatly reduce the loss caused by sapphire materials in the manufacturing process, and the input-output ratio is higher. We estimate that the company's successful development of square ingots may reduce costs by about 40%, further promoting the application of sapphire on mobile phone screen covers. It is optimistic that demand for sapphires in the consumer electronics field has exploded, and for the first time, the company has been given a “buy” rating. As an industry leader, Ored set sail again after listing, and will have a better chance of benefiting from the explosion of industry demand through the power of capital. We predict that the company will achieve net profit of 3.04/5.69/914 million yuan in 2015/2016/2017, and EPS of 0.40/0.74/1.19 yuan respectively. For the first time, we have given a “buy” rating, with a target price of 59.2 yuan (80X in 2016). Risk warning: The uncertainty of applying a sapphire cover on a mobile phone screen scale is causing customers to move upstream.