Event: The company recently released its 2016 annual report. The company achieved operating income of 14.269 billion yuan, an increase of 84.57% over the previous year, and realized net profit attributable to shareholders of listed companies of 777 million yuan, an increase of 65.79% over the previous year. Within the company's performance forecast range, EPS was 0.33 yuan/share, an increase of 65% over the previous year. Opinion: Both operating income and net profit have risen sharply. During the reporting period, the company achieved operating income of 14.269 billion yuan, an increase of 84.57% over the previous year, and realized net profit attributable to shareholders of listed companies of 777 million yuan, an increase of 65.79% over the previous year. EPS was 0.33 yuan/share, an increase of 65% over the previous year. The sharp increase in operating income and net profit was mainly due to a sharp increase in settlement area during the reporting period, but due to the fact that the cost growth rate in the Chongqing, Chengdu, and Wuhan regions was faster than the revenue growth rate, the gross sales margin level declined sharply during the reporting period. The business is mainly distributed in the main urban area of Chongqing, and the national layout is beginning to take shape. In 2016, the company achieved main business revenue of 13.304 billion yuan, an increase of 98.15% over the same period last year, showing that the company has the ability to grow rapidly. The company is deeply involved in the main urban area of Chongqing, while also expanding the share of land reserves in high-Māori core cities such as central China and East China. In 2016, it added 14 new land reserves through tenders, mergers and acquisitions, and joint land acquisition, adding more than 3.2 million square meters of construction area, all located in core cities such as Shanghai, Wuhan, Nanjing, Hangzhou, Suzhou, Chengdu, and Chongqing. According to Kerry data, the company's sales in 2016 were 22.6 billion yuan. Considering the current land reserve city layout upgrade and total volume growth, as well as the intrinsic requirements of the equity incentive plan, the company's sales revenue in 2017 and 2018 is expected to remain high. We are optimistic about the company's entire product line and good cost control capabilities, and believe that the company is expected to enter the 30 billion tier in 2018. The military sector is at the stage where the concept is being implemented. The company's military products sector mainly includes two sectors: military vehicles and exoskeleton robots: in the early stages of the exoskeleton project, the state invests in the military, the company is industrializing, and the huge military and civilian markets will guarantee the high margin characteristics of the product; the military vehicle sector currently has insufficient production capacity, and there is an urgent need to increase capital to expand production capacity and increase the scale of production capacity. According to the expectations of the fixed increase plan, a large amount of performance in the military vehicle and exoskeleton robot businesses was released in 2018, thus establishing the status that 2018 will become the “first year of military business”. Judging from the current fixed increase progress and the military sector R&D process, the company's fixed increase in 2017 and the military industry business will likely increase capital, and the military business can be expected to explode in 2018. The equity incentive plan will promote the improvement of executive management efficiency. The company announced the restricted stock grant list on September 8, 2016, covering 158 management and core employees. The plan not only takes into account the incentives of current executives, but also reserves sufficient incentive space for those entering the list in the future. At the same time, it is worth noting that the restricted stocks included in the incentive plan account for 3.79% of the company's total share capital at the moment. The scope and intensity of this incentive plan is enough to show the company's determination to pay sufficient costs to motivate management and core employees. At the same time, the growth rate of the company's 2016-2018 three-year performance is not less than 10%, 20%, and 30% compared to the 2013-2015 average performance of 348 million yuan. According to the company's pre-disclosed 2016 performance growth range of 65.79%, which greatly exceeds equity incentive requirements, we are optimistic about the rapid growth of the company's performance in 2016-2018. Funding costs continued to decrease throughout 2016. In 2016, the company successfully issued 2.6 billion non-public corporate bonds. The optimization of the debt structure led to a gradual reduction in issuance interest rates. Judging from the pace of corporate debt issuance and interest rates, the company's financing costs were in a continuous downward range in 2016, greatly reducing the pressure on the company's financing costs. The fixed increase promotion is only the final step. The company issued an announcement on the evening of February 20, 2017 to adjust the public offering plan. The distribution targets two specific investors, Weihai Poly and Poly Phase I, raised 1,073 million yuan to invest in new military special vehicles and exoskeleton robot projects. As a reference, we calculated using the original price increase of 6.29 yuan/share. Weihai Poly and Poly Technology, the actual controller of Poly Phase I, will hold 6.59% of the shares to become the company's second largest shareholder, but in reality, the recent stock price center is around 6.8 yuan, and the continuing share ratio of new shareholders will be less than the amount described above. Risk warning: sales fall short of expectations, fixed increase adjustments cannot pass, and industry policies are further tightened