Event: The company released its three-quarter report on the evening of October 28. From January to September 2016, the company achieved operating income of 11.047 billion yuan (YOY 28.48%), net profit of 178 million yuan (YOY 77.93%), net profit of 178 million yuan (YOY 77.93%), and net profit of 881,891 million yuan (YOY 71.86%) in the third quarter of 2016. Net profit for 2016 is expected to change between 10% and 40%. Comment: Expenses are well controlled, non-operating income has increased significantly, and the company's profitability has further improved. From January to September 2016, the company's expenses rate for the period was 6.5% (7.7% in the same period last year). Among them, the control of management expenses and financial expenses increased the company's profitability. Furthermore, since the investment cost of obtaining a subsidiary in the current period is less than the income generated by the fair value of the invested unit's identifiable net assets at the time the investment was obtained, the company's non-operating income increased 551.95% year over year, further releasing the company's performance. Acquire Baosheng Shanghai and effectively carry out industrial integration. The company invested 65.3513 million yuan to acquire 80% of Baosheng Shanghai's shares. Baosheng Shanghai specializes in industrial investment, private housing leasing, and property management. The purpose of this acquisition is to establish the company's management, production and R&D base in the Shanghai region, effectively carry out industrial integration, and use the advantages of resources such as talent, information and services in the Shanghai region to quickly realize the company's strategic planning and layout. The smooth implementation of the acquisition project will also have a positive impact on the company's performance growth and future long-term development. Invest in high-speed rail transit digital signal and intelligent network cable production projects to optimize the company's product structure. According to its own development needs, the company plans to use its own capital of RMB 380 million to invest in digital signal and intelligent network cable production projects for high-speed rail transit. The first phase of the project has a construction cycle of about 1.5 years. After completion, it is planned to produce railway digital signal cables and network cables. The first phase of the railway digital signal cable has a production capacity of 16,000 km/year, with an output value of about 400 million yuan; the first phase of network cable production capacity is 600,000 boxes/year, with an output value of about 300 million yuan; and the second phase of network cable production capacity has increased to 1 million to 1.2 million boxes, with an output value of 600 million yuan. The total production capacity is 1 billion yuan. The technical improvement project for expanding the production of railway digital signal cables has the characteristics of low investment, short cycle time, and remarkable benefits. Further optimize the company's product structure. Profit forecasts and investment advice. The 2016-18 EPS is estimated to be 0.32, 0.42, and 0.63 yuan respectively. Considering that the company is already listed in China Aviation Industry, the company's acquisition of Nissin Transmission and Shanghai Anjie's performance commitment, the 2016-18 EPS is expected to be 0.32, 0.42, and 0.63 yuan respectively. Referring to the current average PE of 37 times that of comparable companies in 2016, the company was given 30 times PE in 2016, maintaining a target price of 9.60 yuan. Maintain a “buy” rating. Risk warning. (1) Increased competition in the power cable industry; (2) uncertainty in military orders.