Key investment points: HVDC product supply BAT, the company's key future core growth direction: In 2015, the company's HVDC products continued to rapidly increase sales revenue, successfully applied to China Mobile, China Unicom, China Telecom IDC, computer rooms, and were widely used by famous domestic Internet companies Baidu, Tencent, and Alibaba, with broad market prospects. HVDC uses DC power supply, which reduces the internal conversion links of the system, improves energy conversion efficiency, and reduces the potential failure rate. 1. HVDC power system construction investment is reduced by 20%-40%, operating costs are reduced by 10%-20%, and the cost advantage is obvious; 2. The degree of integration is high, and the floor space is reduced by 60-80%, so IDC can deploy more servers or secure redundant space; 3. Reliability is greatly enhanced, and maintenance is simple. HVDC systems have all-round advantages, and we believe that replacing UPS will be inevitable. We expect that the scale of China's cloud computing industry will reach the current level in the US by 2020. Cloud computing servers consume 120 billion kilowatts of electricity per year, and require 22.8 million kilowatts of power to supply power at 60% of the operating load. This is an important development opportunity for the data center power supply industry. Considering that in the future, the unit price of data center power supplies will drop to 1,000 yuan per KW, the country will also form a huge market of over 20 billion dollars within 4 years. If the HVDC method is used for all of these new power generation facilities, the size of the HVDC market will increase tenfold from the current level. We are very optimistic about the development of the HVDC industry in the next five years. The company has a multi-product line layout, and the traditional power supply business is developing steadily: In terms of communication power supplies, the company leverages its comprehensive advantages such as product technology, cost, service and response speed, and the company's market share in the traditional communication power supply sales field continues to expand, and the company has won the first place in the market share of the Tower Company. In terms of energy saving business, the company's EPC projects under construction have entered a profit period, causing the company's contract energy management business revenue to show a clear upward trend compared to the same period last year. Various projects have continued to reap steady cash flow, and the revenue growth rate has reached 118%. In terms of emergency power supplies, the rail transit industry is growing rapidly, and its market share is constantly increasing. In terms of module power supplies, profits have increased by more than 100%, profit margins have increased significantly, and profitability has increased. Equity incentives and allotment plans boost confidence in the company's future development: The company granted 14.05 million restricted shares to 103 eligible incentive recipients. On the one hand, it retained critical R&D and management talents for the company's long-term development, and on the other hand, it provided a guarantee for the company's performance growth. The company's allotment plan was approved, and it plans to raise 800 million yuan in capital. After receiving capital, the company, on the one hand, continued to expand the production capacity and technical process level of the Anhui factory, and on the other hand, invested close to 300 million yuan to build a research and development center to maintain the company's technological advantages. Furthermore, the company's repayment of part of the bank loan will also strongly reduce financial expenses and enhance the company's profitability. Profit forecast and investment rating: The company's 2016-2018 EPS is expected to be 0.18 yuan, 0.18 yuan, and 0.25 yuan, corresponding to PE70/70/50X. We are optimistic about the company's layout in the HVDC industry and expect it to enter a period of rapid development starting in 2017, giving it a “buy” rating. Risk warning: HVDC power orders fall short of expectations, the development of the traditional power supply industry falls short of expectations, the risk of falling gross margin due to increased competition, and the risk that stock prices will be under pressure due to the recent unlocking of restricted stocks.