Summary of the report: Leading the high-end coal machine industry, building a second main business for new energy vehicles. The company is a leading supplier of coal machinery equipment in China. It has mastered the core technology of high-end coal machines and adheres to the product positioning of high technology and high added value. Against the backdrop of a continuous decline in the domestic coal machinery industry, the company's related business has stabilized at a high gross margin level of more than 40%. At the same time, it is actively seeking change and rapidly laying out the NEV industry chain to develop the second main business. Fast entry into the NEV industry chain, performance exceeding expectations is worth looking forward to. The company's new energy vehicle business is at a tight pace, with a deep layout of the entire industry chain of “three electric power” manufacturing, charging equipment construction and back-end operation: the company joined hands with China Aviation New Energy to set up Hefei Chuangda. The first phase of the 200 million Ah battery pack and 30,000 motors and controllers production line is being implemented rapidly, and production progress is expected to exceed expectations. After delivery, it is expected to achieve annual sales revenue of 1.5 billion yuan, net profit of about 130 million yuan, and there is room for further expansion of production capacity. The company's controlling shareholder acquires BMS leader Yineng Electronics, which is likely to inject into the company in the future, enhance the company's competitiveness in the field of power batteries, expand customers to car companies other than China Aviation New Energy, form “Beichuang University, South China Energy” industry collaboration, and increase the company's performance. The company established a new energy vehicle operating company, formed close trade relationships with automakers through the purchase and operation of new energy vehicles, and promoted the evolution of the company's new energy vehicle “industry chain” into an “ecosystem”. It is estimated that profits will exceed 10 million yuan in 2016. Downstream coal bottomed out and rebounded, and the coal machine industry waited for the spring breeze. Benefiting from supply-side reforms, the rebound in downstream coal prices will drive fixed asset investment in the coal industry back up, and the continuous increase in the mechanization rate of the coal industry will provide continuous benefits to the company's coal machine sales business. At the same time, demand for coal machine replacement from the company's customers will be met in 2017, and it is optimistic that the company's coal machine business will pick up growth in the coming years. Profit forecast and investment ratings: We expect the company's 2016-2018 operating income to be 940 million yuan, 2.45 billion yuan and 3.78 billion yuan respectively, net profit of 120 million yuan, 220 million yuan and 290 million yuan respectively, EPS of 0.18 yuan, 0.34 yuan and 0.45 yuan respectively, corresponding PE of 58.9 times, 31.7 times and 23.9 times, corresponding to target stock prices of 13.4 yuan, covering the “highly recommended” rating for the first time. Risk warning: The company's “Sandian” production capacity release fell short of expectations, the growth rate of the new energy vehicle industry slowed down, China Aviation's new energy production and sales fell short of expectations, and the coal engine business growth fell short of expectations.