Investment essentials. 1. The company takes the traditional main business as the core, actively carries out epitaxial development, and constructs an integrated strategic layout of the “industrial and financial network”. Although the revenue of the company's motorcycle engine manufacturing business has been declining year by year, the gross margin has increased by adjusting the product structure, and the impact on the company's profit level is limited. Affected by the increase in domestic and foreign demand, the general power machinery manufacturing business grew rapidly, and gross margin also rebounded, becoming a new profit growth point for the company. The company has built a strategic layout integrating the “industry and finance network” through extended expansion into industrial chain finance, the “Internet +” automotive aftermarket, and general aviation. 2. Increase capital and invest in Shenfei to focus on transforming the field of military drone engine manufacturing and building China's Predator drone. The company terminated the cooperation agreement with Hongbaichuan, abandoned the development of complete drone aircraft, and focused its existing R&D resources on the aero engine business. The company increased its capital and invested in the Shenzhou space vehicle. Shenfei's core product is the “Rainbow” series of drones. It is the first batch of attack drones in China to achieve batch exports and the largest number of attack drones. The Rainbow 4 is superior to predator drones in all aspects, and is known as a Chinese predator. The TD0 aero engine carried by the company and the Tianjin Internal Combustion Engine Research Institute was successfully tested and tested successfully. It is hoped that the Rainbow series of drones will be officially installed in the future and become the heart of domestic military drones. 3. China is installing a large number of military drones, and the market size may reach 10 billion in 2024. China's military aircraft are completely behind the US in terms of quantity and performance. By installing a large number of military drones, the gap with the US can be quickly narrowed. Currently, the number of military drones used by China has ranked first in the world. In 2014, China's military drone market space reached 2.7 billion, and relevant agencies expect it to reach 10 billion by 2024. 4. Profit forecast. The company is expected to achieve net profit of 435 million yuan, 488 million yuan, and 521 million yuan in 16-18, corresponding EPS of 0.38 yuan, 0.43 yuan, and 0.45 yuan, and corresponding PE of 29X, 26X, and 25X, giving recommended ratings. 5. Risk warning. The expansion of the military drone engine business fell short of expectations.