Invest in the establishment of a hydrogen energy company and launch an industrialization project company announced on October 10 that Zongshen New Energy Company, a wholly-owned subsidiary, will jointly invest 10 million yuan with Mr. Wei Jinzhu to establish Chongqing Zongshen Hydrogen Energy Technology Co., Ltd. Zongshen will invest 9 million yuan to account for 90% of the shares, and Mr. Wei Jinzhu will invest 1 million yuan to account for 10% of the shares to implement R&D or industrialization projects such as hydrogen fuel cell systems for vehicles, special power supplies for drones or submersible vehicles. This cooperation is a project where the company undertakes ZPP's technical reserves and project experience restart. The drone industry has ushered in rapid development. On November 6, 2015, the company that actively invests in Shenzhou Aircraft signed an agreement with major shareholders of Shenzhou Aircraft to participate in capital increases and stock expansion. Shenzhou Aircraft is a complete aircraft manufacturer of high-end and large-scale drones in China, focusing on the Rainbow 3 and 4 series drones. After the capital increase and stock expansion, Zongshen's shareholding ratio was 16%. The company signed a strategic cooperation agreement with the China Aerospace Aerodynamics Technology Research Institute on September 26 this year. It will carry out strategic cooperation in aerodynamic engine technology research and development, aerodynamic equipment development and testing, small and medium-sized aerodynamic engine manufacturing, and aerodynamics technology innovation platform construction, etc., to accelerate progress in military drones. The majority shareholders' holdings increased plus employee shareholding, demonstrating confidence in the company's transformation. The first phase of the company's employee shareholding plan was purchased at 9.99 yuan/share on December 8, 2014, with a transaction amount of 39 million yuan. On January 15, 2016, it was announced that Mr. Zuo Zongshen, the actual controller of the company, increased his holdings by 1 million shares at a transaction price of 9.98 yuan/share. The increase in shareholders' holdings and employee shareholding demonstrated confidence in the company's transformation and upgrading and layout of the drone industry strategy. Investment advice: Buy-A investment rating, target price of 14.00 yuan for 6 months. We expect the company's net profit growth rates from 2016 to 2018 to be 21.9%, 33.2%, and 21.3% respectively, and EPS of 0.41, 0.54, and 0.66 yuan respectively, giving a buy-A investment rating, with a target price of 14.00 yuan for 6 months. Risk warning: Fuel cell technology research and development falls short of expectations, and competition in the drone industry is intensifying.