Key investment points: leading filter industry, high R&D investment guarantee. The company started as an agent for European filter brands, and in 2010, the company entered the GEM market. Mainly engaged in R&D, production, and sales of high-performance high-temperature filters for the core components of bag dust collectors, it is the only listed company for domestic high-temperature bag dust filter companies. In 2015, the company achieved sales revenue of 688 million yuan, an increase of 51.41% over the previous year; net profit attributable to shareholders of listed companies was 68.87 million yuan, an increase of 17.43% over the previous year. The company has long attached importance to R&D, and its share of R&D investment has continued to rise in recent years. In 2015, the company invested 29.05 million yuan in R&D, accounting for 4.2% of revenue. Acquired Roca Environmental Protection to get involved in smoke control. In April 2015, the company purchased 100% of Roca Environmental's shares with 252 million yuan. Roca Environmental Protection specializes in flue gas denitrification, relying on SCR, SNCR and other technologies to provide technical support and equipment for flue gas denitrification system integrators. Currently, in addition to being used in thermal power, products and technologies can also be used in fields such as urban heating, cement furnaces, steel, and waste incineration. Through this merger and acquisition, 3D wire integrates superior resources for dust removal and desulfurization, and expands the flue gas treatment industry chain horizontally. The company promised that in 2014, 2015, and 2016, Loca Environmental will achieve net profit of 26.5 million yuan, 33.13 million yuan, and 41.41 million yuan after deducting non-recurring profit and loss, respectively. Acquire Xiamen Poting and enter international bulk materials transportation and storage. In September 2015, Sanwei Silk used 70.48 million yuan to buy 80% of Xiamen Poting's shares held by Kunna Trading and Shangyue Investment. After the transaction is completed, Sanwei Silk will directly hold 100% of Xiamen Poting's shares. Xiamen Poting is mainly engaged in research and development, design and integration of bulk material transportation and storage systems. Most of its end customers are in the same industries as 3D wire customers, including thermal power, steel smelting, etc., and is at the forefront of the industrial chain. The business has spread to mainland China, Taiwan, the United States, Germany, Australia, Vietnam, the Philippines, Indonesia, etc., and accounted for 90% of overseas revenue from January to October 2015. After the acquisition of Poting, Xiamen, 3D Wire can not only provide customers with services such as design, integration, and maintenance of front-end bulk material transportation and storage systems, but also provide customers with comprehensive environmental services such as dust removal and denitrification for back-end flue gas treatment. Relying on 3D Silk's comprehensive environmental service platform, Xiamen Poting's performance will also grow rapidly. According to performance promises, the audited net profit attributable to owners of the parent company in 2015, 2016, and 2017 was not less than 72 million yuan, 97.2 million yuan, and 131.22 million yuan, respectively. Profit forecasting and valuation. The company is expected to achieve operating income of 11.44 billion yuan and 1,707 billion yuan in 2016-2017, and achieve net profit attributable to the parent company of 178 million yuan and 248 million yuan, corresponding EPS of 0.48 million yuan and 0.66 yuan respectively. Referring to the same industry valuation and the company's business development, the company was given 50 times PE in 2016, corresponding to the target price of 24 yuan, and a purchase rating of 24 yuan. Risk warning. (1) Performance promises fall short of expectations; (2) poor integration of mergers and acquisitions; (3) Xiamen Poting's poor overseas expansion.