Key investment points: Raise the target price to 50 yuan to maintain the “increase holdings” rating. The curtain of a new round of reform of the Chinese Academy of Sciences has officially begun. We expect Optoelectronics to be the first to become a pilot reform, thus opening up new imagination space for the company's development. The company is a typical example of a “small market capitalization story,” maintaining the 14-16 EPS forecast of 0.79/1.02/1.33 yuan. The target price was raised from 44.5 yuan to 50 yuan, corresponding to 63 times PE in 2014. The Chinese Academy of Sciences has launched the “First Action” program to kick off a new round of reforms. On August 19, the Chinese Academy of Sciences announced the implementation of the “First Action” Plan and Outline for Comprehensive and Deepening Reform of the Chinese Academy of Sciences, which will strive to achieve the “Four Leading” goals by 2030 through 25 major reform initiatives in 5 major areas. The most noteworthy ones are: 1) Research Institute Classification Reform: By 2020, we will steadily advance the institute classification reform, basically complete the design of the institutional mechanism for classification positioning and classification management, and launch four types of scientific research institution construction pilot projects; 2) adjust and optimize the research layout: focus on the five major sectors of strategic competition, basic science and cross-cutting frontiers, national defense science and technology innovation, and strategic emerging industries. We believe that “taking the lead” touches on the core and core of institutional reform and puts forward reform ideas and timetables, which means that the Chinese Academy of Sciences, which has 12 branches and more than 400 units, has officially begun a new round of reform. Optoelectronics is expected to be the vanguard of the reform pilot, opening up new room for imagination for the company's major development. The company's majority shareholder, Changchun Institute of Optoelectronics, is one of the largest research institutes of the Chinese Academy of Sciences. It is the national team and main force in China's optoelectronics industry, with revenue reaching 940 million yuan in 2013. Based on its core business and industry positioning, we expect Optoelectronics to be the first to become a pilot reform project for the Chinese Academy of Sciences, making breakthroughs in industrialization of innovative achievements, deadministration reform, and comprehensive open cooperation. We anticipate that in the second half of 2014, the Institute of Optoelectronics will accelerate the industrialization of small satellites, establish small satellite companies, and organize CMOS projects to be submitted for major national projects. With the deepening of reforms, Oppo Optoelectronics will fully benefit. Risk warning: the reform progress of the Chinese Academy of Sciences falls short of expectations; military orders fluctuate greatly; new product research and development risks.