Event: From January to September 2016, the company achieved operating income of 103,7546,800 yuan, an increase of 79.65% over the same period last year, and net profit attributable to the parent company was 168.3851 million yuan, an increase of 94.45% over the same period last year. During the reporting period, the company implemented a major asset restructuring and added the merger of Guanzhi Automation and Huaxiao Precision from May to September 2016, which had a great impact on the company's earnings in the first three quarters. The company has stepped up efforts to develop new products, new regions, and new customers on the basis of its original power automation products and markets, and the operating income of power automation increased compared to the same period last year. Acquire Guanzhi Automation and Huaxiao Precision to fully promote intelligent manufacturing business: China will fully implement “Made in China 2025” in 2016, and there is broad scope for intelligent manufacturing. The company is based in Yongqian Electromechanical. Through the acquisition of Guanzhi Automation (100% equity) and Huaxiao Precision (100% equity), the company has reached a complete industrial chain for intelligent manufacturing, and has further entered the supply chain system of automobile OEMs. Guanzhi Automation has long served German brands such as Volkswagen, and has rich experience in automotive side and bottom panel automation; Huaxiao Precision is Nissan's global strategic partner, and the AGVs produced are widely used in assembly workshops. In the future, the company is expected to use the technical and resource advantages of the three companies to deeply penetrate the supply chain of automobile OEMs, and rapid development can be expected. The main business is growing steadily and expanding the logistics automation industry chain: Since 2011, competition in the original power distribution automation industry has intensified, and the company's gross margin and profitability have declined markedly. Beginning in 2013, the company's business bottomed out and rebounded. Achievements in R&D and market development gradually became apparent, sales of electrical distribution products increased, and gross margin gradually rebounded. During the reporting period, the company increased investment in research and development, increased the development of new products and the optimization and upgrading of existing products, and maintained the technical advantages and core competitiveness of its products. The company's capital increase in Shenzhen Lizi Robotics Co., Ltd. will help enhance the company's technological research and development capabilities and product innovation capabilities in the field of intelligent logistics systems for industrial production; and establish a joint venture with HKUST logistics companies to expand and optimize the company's industrial layout in the fields of intelligent logistics systems and warehousing automation for industrial production. Investment recommendations and ratings: The company's net profit for 2016-2018 is estimated to be 233 million yuan, 306 million yuan and 397 million yuan, EPS is 0.32 yuan, 0.42 yuan and 0.55 yuan, and PE is 66 times, 50 times and 38 times, giving it an “increase in holdings” rating. Risk warning: Business development falls short of expectations, and market competition risks increase