Investment highlights: Event: The company released its annual performance report on March 15. In 2016, it achieved operating income of about 987 million yuan, an increase of 23.41% year on year; realized net profit attributable to shareholders of listed companies was about 120 million yuan, up 24.59% year on year; EPS was 0.291 yuan, up 23.83% year on year; it plans to distribute 0.70 yuan (tax included) to all shareholders for every 10 shares. Performance growth is in line with expectations, and the air conditioning fan business still dominates. The company's annual revenue and net profit are in line with expectations, and the size and quality of assets have improved. The main business of air conditioning fans and accessories achieved sales revenue of about 62.6 million yuan, accounting for 62.65%, and is still the company's leading product; building fans and cold chain fans each accounted for 11.54% and 9.13%; export sales revenue was about 230 million yuan, an increase of 53.35% over the previous year, accounting for 23.43%, which enabled the expansion of upstream and downstream business in overseas markets. Consolidate the leading position in the fan industry and expand emerging industries through epitaxial expansion. The company is the largest central air conditioning fan development and manufacturer in China. In recent years, it has made major mergers and acquisitions, developed the building fan business, promoted EC energy-saving motors, opened up the international market, and consolidated its leading position in the air conditioning fan industry; at the same time, it is actively expanding strategic emerging industries such as military, new materials, and new energy, holding Qingdao Marine New Materials, and completing the acquisition of Hangzhou Tiecheng Information, a leading charger company. We believe that the company uses fan motors and new energy chargers to transform and upgrade its dual main business, and that the military business will further promote high performance growth in the future. The acquisition of a leader in new energy vehicle chargers opens up a new growth point. The company completed the acquisition of 100% of the shares of Tiecheng Information, a leading charger company, and integrated EC motor+intelligent electronic control technology, which is expected to transform and upgrade across the two main businesses of fan motors and NEV chargers. Tiecheng Information is a leading manufacturer of electric vehicle chargers. It has world-class and domestic leading software and hardware products such as on-board chargers and DC converters. Charger products are important components for new energy vehicles. Tiecheng Information has strong profitability. The cumulative net profit promise for 2016-2018 is not less than 195 million yuan, and future growth is expected to be good. It is expected that it will continue to benefit from naval ship line-up, and I am optimistic about the volume of PI foam released. The holding company Marine New Materials has complete scientific research, production and supply qualifications for military products. Its main products include PI foam materials, multi-functional coating materials, etc. The product technology is leading domestically and is widely used in naval ships and ships. PI insulation and sound absorption materials were independently developed and were the first in China to pass military certification and obtain the “National Key New Product” certificate. The company's military products business is expected to continue to benefit from naval fleet deployment. We estimated in our report “Based on Tradition, Adding Military Industry and New Energy, and the Troika Will Drive High Performance Growth”. In the next 30 years, China's navy will build about 400 new ships, with a displacement of about 4.45 million tons, and the PI foam market size will exceed 35 billion yuan. Profit forecasting and investment advice. We expect the company's EPS in 2017-2019 to be 0.46, 0.67, and 0.84 yuan respectively. Considering the company's broad growth space in the military industry, refer to the average valuation of comparable companies 52 times. In 2017, the company was given 50 times PE, corresponding to a target price of 23.00 yuan, maintaining a “buy” rating. Risk warning. The boom in the fan industry has declined. The expansion of military products fell short of expectations. The NEV business declined.