Nanfang Bearing is one of the largest manufacturers of needle roller bearings and surpassing clutches in China. The company acquired shares in Wuxi Pterosaurs in 2016 to enter the aviation aftermarket and open up growth ceilings. Key investment points: Invest in Wuxi Pterons to enter the aviation sector. Wuxi Pterosaurs is the only company in China that has obtained approval from the General Administration of Civil Aviation to engage in aviation tire business, and has a number of core invention patents. According to the company's promises, it can be held as soon as the first half of next year, with full capital in 2018. Since the aviation tire industry has high industry barriers and strict qualification certifications, the Wuxi Pterosaur, which has a technological monopoly in the domestic market, is undoubtedly a high-quality asset with predictable returns. The traditional business structure stabilizes, improves quality, and optimizes development. The company's bearing products are widely used in automobiles, industry and other fields. Its needle roller bearings are leaders in the industry, with a global market share of about 30%. Benefiting from the steady growth of the automotive industry, and after the recent optimization and adjustment of the company's structure to remove excess storage, we believe that the company's traditional bearing business will continue to rise steadily. The production capacity of aviation tires has increased, and the scale effect is gradually showing. The company's traditional business has stabilized, and related revenue and profit levels have been rising steadily. 2017-2018 is expected to increase the production capacity of aircraft tires from the current 15,000 to 100,000 after the completion of the construction period for the company's aviation tire products. We expect the company's aviation tire business to have a relatively good performance in the second half of 2017. Profit forecasting and valuation. Assuming that the company's foreign investment targets can fulfill its performance promises, traditional business is steadily rising, and aviation aftermarket development is progressing as expected. The 2016-2018 EPS is expected to be 0.21, 0.26, and 0.31 yuan, respectively, which is 43 times the PE for 2018. Considering that the company's aviation tire business has great elasticity for growth, it is a scarce target in the aviation aftermarket, and a recommended rating is given. Risk warning: aviation aftermarket development blocked in Siam, OAP business failed test