Incidents. On June 16, the company announced the completion of the capital increase for Tianjin Fengshi Interactive Technology Co., Ltd. The capital was increased to Fengshi Interactive to complete the layout in the two fields of voice and vision. In this capital increase, the company invested 18 million yuan and held 10% of the shares. Fengshi Interactive is a visual interaction technology provider in the field of artificial intelligence. It has developed gesture recognition products since 2011, and launched some products in the second half of 2015, mainly for VR/AR, smart cars, smart TVs, and smart homes to achieve the gesture interaction function of such products. The basic core technology and technical team accumulated by Fengshi Interactive over the years will support the company to launch a series of visual interaction products. It is a leading domestic technology gesture interaction manufacturer, and its technical level is highly recognized in the industry. This investment is another investment in a visual interaction technology application project after the company invested in the Turing robot voice interaction technology project in 2015. After the investment was completed, the company made an investment layout in the two basic artificial intelligence technology application fields of vision and voice. Invest in Beijing Lightyear to strategically transform artificial intelligence. In order to promote the transformation and upgrading of the enterprise strategy and create new business growth points, the company invested 50 million yuan in 2015 to increase the cash capital of Beijing Lightyear Infinity Technology Co., Ltd., and obtained 14.44% of the shares (with a post-investment valuation of 346 million yuan). Beijing Lightyear is one of the leading companies in the development and application of robot operating systems in China. It has a first-mover advantage, has a certain technical threshold, and has strong technical advantages in semantic recognition and artificial intelligence. The cloud robot brain “Turing Robot” developed by the target company can provide intelligent human-computer interaction services, can connect to various products requiring voice human-computer interaction, such as physical robots, smart toys, VR (virtual reality), and wearable devices in the form of a cloud, and provide integrated and low-threshold robot brain access services to third party users, adapting to various scenarios, and has broad application prospects. On January 20, 2016, Aofei Animation announced that it signed a “capital increase agreement” with Beijing Lightyear to invest 50 million yuan, obtain 5% of the shares, and reach a valuation of 1 billion yuan after the investment. Raise funds to improve and enhance the company's blasting service capabilities and level of informatization. The company's fixed increase plan has been approved by the Securities Regulatory Commission. It will add 30 million m3/year and 22 million tons/year underground mine blasting engineering integrated service capabilities, 2 million m3/year mine ecological restoration service capacity, intelligent production line transformation, etc., which will help further improve the company's ability to integrate blasting services, expand the company's business scale, and enhance the company's management level and continuous operation capacity through the implementation of “intelligent manufacturing, management informatization, and safety digitalization”. Profit forecasting and investment advice. Considering that the anti-terrorism situation in the Xinjiang region is gradually stabilizing, the revenue of Tianhe, Xinjiang will gradually recover. The net profit attributable to the company's parent company in 2016 to 2018 is expected to be 0.89/0.97/109 million yuan, an increase of 149.28%/8.95%/12.74% over the previous year; the corresponding EPS is 0.11/0.12/0.14 yuan, respectively. As one of the large-scale civilian explosion enterprises with the most complete qualifications and the widest regional coverage in China, the company actively lays out new fields of artificial intelligence by participating in Beijing Lightyear and Fengshi Interaction. In 2016, the average PE value of civilian explosion industry companies was 32 times, involving artificial intelligence companies, the average PE value was 145 times. Comprehensive consideration was given to the company 100 times PE in 2016, corresponding to a target price of 11 yuan, for the first time covering a “gain” rating. Risk warning. The risk that traditional business boom will continue to decline; the risk that the commercial application of visual interaction and voice recognition technology is progressing less than expected.