Report Summary: The company is a high-tech enterprise focusing on R&D, production, sales and technical service of metal wear-resistant materials. It has now developed into one of the leading manufacturers of metal wear-resistant materials in China. The company mainly produces different series of products such as “Fengxing” brand high and low chromium alloy casting sections, multi-alloy casting balls and liners. It is a new type of grinding medium and is widely used in material grinding production processes in metallurgical mines, building materials, cement, thermal power generation, magnetic materials, etc., and is a leading professional supplier of wear-resistant materials in China. The initial capital raised by the company is mainly used for the construction of production projects and technical center projects with an annual output of 50,000 tons of grinding media (balls, segments). After the fund-raising project is completed, the company's grinding medium production capacity will exceed 110,000 tons, making it an uncompromising leading enterprise in the domestic metal wear-resistant materials industry. Furthermore, the construction of a technology center will further enhance the company's technical strength and facilitate the company's accelerated development and commissioning of new wear-resistant materials and products. Objectively speaking, since the company's downstream products such as wear-resistant metal balls and segments are mainly concentrated in strong cyclical industries such as cement, coalfields, electricity, and mining, these industries are currently in an adjustment period of overcapacity, slowing growth, and transformation and upgrading, so demand for wear-resistant materials such as wear-resistant balls and segments has slowed down. This is bad for the company. However, the good side is that wear-resistant materials are consumables, and although demand growth is slowing down, they are relatively stable. Furthermore, after listing, the company's financial strength increased dramatically, which was conducive to epitaxial acquisitions of other companies in the ball mill medium industry and increased the company's epitaxial expansion capacity. The company's revenue for 2015, 2016 and 2017 is estimated to be 554, 653, and 755 million yuan, respectively, up 6%, 17.09% and 15.59% year on year; net profit of 3928, 4533, and 51.07 million yuan respectively, up 5.71%, 15.39% and 13.10% year on year, respectively; EPS of 0.45, 0.52 and 0.58 yuan respectively. We believe that the company's reasonable pricing range should be between 13.50-15.75 yuan, and the dynamic price-earnings ratio corresponding to the 2015 EPS of 0.45 yuan should be between 30-35 times. Risk: Risk that downstream demand will continue to be sluggish; risk that the production capacity of fund-raising projects will be released less than expected