Key investment matters: The non-public offering of shares was approved by the Development and Review Committee of the Securities Regulatory Commission on December 21, 2016. According to the company announcement, the Issuance Review Committee of the China Securities Regulatory Commission reviewed the company's application for the non-public offering of shares. According to the review results of the meeting, the company's application for the non-public offering of shares was approved. Safe view: Big strategy, good start: The company has established the strategic goal of “smart gold, health gold”. “Smart Jinming” aims to keep up with the pace of Industry 4.0, cater to the future direction of automation and intelligence of machinery and equipment, and moderately enter related fields such as automation equipment, automatic control, and robot research. This private offering mainly supports the “Smart Jinming” strategy. It is proposed to issue no more than 50 million shares and raise no more than 506 million yuan in capital to build three major projects, including a special multifunctional membrane factory, agricultural ecological film intelligent equipment, and a cloud-based big data smart service platform, to build the Jinming intelligent ecosystem. It is estimated that these three projects will contribute more than 180 million in total net profit each year after delivery. This non-public offering was approved by the Development and Review Committee of the Securities Regulatory Commission. It can be described as a success in the first battle of the “Smart Jinming, Health Jinming” strategy, laying the foundation for the company's future development. In this release, Ma Jiazhen, the son of the actual controller and general manager, subscribed for no less than 100 million yuan, showing great confidence in transformation and upgrading. “Health Jinming”, layout of rehabilitation robots: In the strategic direction of “Health Jinming,” the company and Tsinghua University jointly established a rehabilitation robot research center in 2015 to lay out rehabilitation robots, marking the company's official entry into the service robot and healthcare industry, which is of great significance for the company to achieve industrial transformation and upgrading. Currently, the main research direction of the Joint Research Center is: products for hospital and community rehabilitation, including upper limb neurological rehabilitation training robots and exoskeleton walking training rehabilitation robots for hemiplegia patients, and products for community and home rehabilitation, including smart prosthetics, life support technology products for the disabled and the elderly, etc. British market research firm Technavio reports that the global rehabilitation robot market was 577 million US dollars in 2015 and is expected to grow to 1.73 billion US dollars by 2020, with a compound growth rate of 24.51%. As far as China is concerned, there are currently more than 86 million disabled people of all types and nearly 200 million elderly people. The dependency ratio of the elderly population has reached 14.33%, which is above the global average. There will be huge demand for rehabilitation robots and other products in the future. Downstream recovery and improvement in the main business: In terms of film machinery, we believe that if the downstream production capacity renewal rate is stable, there should be a positive correlation between demand for film machinery and the increase in film production (demand) in the current year. Statistics show that from 2011 to 2014, this increase increased steadily year by year, while it declined sharply in 2015, which is in line with the changing trend in the company's performance. Based on China's film product production volume from January to October 2016, we predict that film production for the full year of 2016 will increase by about 850,000 tons compared to 2015. This increase is about 64% higher than the previous year. This trend is expected to continue in the future, and the company's main business is recovering with the downstream industry. On the other hand, the company is also actively expanding the production and sales of high-end special multifunctional films. Relying on the company's advanced machinery and equipment and intelligent management, it has received some market recognition. After only one year of operation in 2015, it achieved an operating income of about 52.46 million yuan and an operating profit of 9.16 million yuan, and the prospects are quite promising. Investment advice: The approval of this fixed increase review is an important step in the company's overall strategy. I am optimistic about the positive effects of the company's fixed growth project on the company's future development, and the broad development space of the company's big health strategy in the future. We believe that the gradual recovery of the macroeconomy and downstream industry and the growing high-end film market will bring new opportunities for the company's development. The company's EPS for 2016, 2017, and 2018 is estimated to be 0.18 yuan, 0.31 yuan, and 0.42 yuan respectively, corresponding to the current price-earnings ratio of 100 times, 59 times, and 43 times, respectively, maintaining the “recommended” rating. Risk warning: (1) macroeconomic downturn, downstream demand is insufficient; (2) the development of the big health strategy falls short of expectations; (3) sales of high-end functional films fall short of expectations.