Zentong Electronics is the world's largest industrial base in the field of financial payment information security products, providing customers with comprehensive and timely product services. Currently, the company's main business includes four major sectors: financial electronics, IDC big data and cloud computing, internet finance, and energy saving and environmental protection. In the future, the company will also gradually build an industrial ecosystem centered on secure payments, where all businesses support each other and develop collaboratively. Revenue for the first three quarters of 2016 was 953 million yuan, up 89.02% year on year; net profit was 31.888 million yuan, up 3.45% year on year. The main reason for the high revenue growth rate is the increase in revenue from autonomous terminals and LED products, as well as the addition of revenue from IDC business and electronics trade business. The increase in R&D investment and interest expenses temporarily affected the growth rate of net profit, which is basically the same as last year. However, considering that most orders for financial electronics and other products confirm revenue at the end of the year, the release of year-end results is worth looking forward to. Financial payment information security products are the company's traditional advantage products, and have high alternative barriers and customer stickiness. The company has strong cooperative customers at home and abroad, such as Agricultural Bank, China Telecom, OKI, Fujitsu, etc. In order to further meet customer needs, the company has developed O2O solution services, helped financial institutions and other customers expand their external service channels, realized the integration of multiple online and offline channels, provided users with very convenient integrated services, and opened up new value-added profit space for the company. The company is actively developing IDC business. It now has data centers in Guangzhou and Dongguan, and is currently constructing data centers in Shenzhen and Changsha. It plans to build no less than 30,000 racks in the future. With all of these racks put into operation, the IDC business will be able to bring about 300 million dollars in net profit to the company every year, which is an important component of the company's net profit. Investment strategy: Optimistic about the company's high technical barriers and leading industry position in traditional financial electronic products, and the potential for performance growth in new businesses such as electronics trading, O2O solutions, and IDC. The company's revenue for 16-18 is estimated to be 13.95, 17.71 and 2,050 billion yuan; net profit is 1.09, 1.38 and 174 million yuan respectively; EPS is 0.21, 0.27 and 0.33 yuan, respectively; PE is 86.82, 68.69 and 54.52 times, respectively. Considering the high growth of the new business, it was given 80 times PE in '17 and a target price of 21.6 yuan for 6 months, covering the first time, a “recommended” rating. Risk warning: Product sales fall short of expectations; new business development falls short of expectations.