Guide to this report: By participating in Beijing Lightyear, the company has taken the first step in transformation in the field of artificial intelligence and robotics, and the construction of a civilian explosion smart factory will also upgrade traditional business. The first coverage gave a “gain” rating, and the target price was 12.1 yuan. Key investment points: The first coverage gives an “gain” rating, and the target price is 12.1 yuan. The market positions the company as a supplier of explosive materials and equipment, and we believe that by participating in Beijing Lightyear, the company will open up a new business field - artificial intelligence robots. Beijing Lightyear has core algorithms in semantic understanding and machine learning. The cloud-based robot brain platform and wormhole voice assistant provide open back-office support for applications in various fields, and the market space is limitless. The estimated net profit for 15-16 will be 0.9/096 million yuan, and EPS will be 0.11/0.12 yuan, respectively. Considering the possibility of a subsequent epitaxial layout in the artificial intelligence industry, 110 times PE was given, with a target price of 12.1 yuan, and an “increase in weight” rating. Cloud layout artificial intelligence injects intelligent brains into physical robots. The company took a 14.44% stake in Beijing Lightyear in September this year. As a first step in the transformation to the field of artificial intelligence robots, the company may focus on robotics and intelligent clouds in the future. Beijing Lightyear is one of the earliest companies in China to commercialize artificial intelligence robots. It has core algorithms in semantic understanding and machine learning, and the semantic recognition accuracy rate is as high as 85%. The main products, the cloud robot brain “Turing Robot” platform and Wormhole voice assistant are highly recognized by hardware carriers such as downstream physical robots, vehicles, home appliances, VR, and wearable devices: the Turing robot platform has an open API port and is currently connected to more than 70,000 partners; the Wormhole Voice Assistant has more than 40 million users. Build a smart factory for civilian explosions and provide integrated blasting services. As the blasting industry gradually enters a period of decline in industry prosperity, the company is seeking changes and upgrades in explosives production methods and business models. By integrating IoT technology and intelligent logistics management into the whole process of production, storage, distribution, and use of explosive products, the goal of “safe production in digital Jiangnan” is achieved. In the future, the company may extend to the downstream industrial chain and use information technology to improve the service level of blasting engineering. Catalyst: An epitaxial layout around artificial intelligence and robotics. Core risk: Downstream demand in the explosion industry is weak.