Incident: Dima Co., Ltd. recently released its 2016 annual report. In 2016, the company achieved operating income of 14.269 billion yuan, an increase of 84.57% over the previous year, achieved net profit attributable to the parent company of 777 million yuan, an increase of 65.79% over the previous year, and realized net profit attributable to the parent company after deduction of 602 million yuan, an increase of 28.63% over the previous year; the corresponding EPS was 0.33 yuan, which exceeded our expectations. Comment: The real estate business has exploded. In 2016, the company's real estate business achieved explosive growth, achieving annual revenue of 13.3 billion yuan, an increase of 98.15% over the previous year, accounting for 93.64% of the total annual revenue. Dima Co., Ltd. adheres to the strategy of “selection and deep cultivation” and lays out Tier 1 and 2 cities in Southwest China, East China, and Central China. During the reporting period, the company added 14 new land reserves, adding more than 3.2 million square meters of construction area. The above plots are all located in core cities such as Shanghai, Wuhan, Nanjing, Hangzhou, Suzhou, Chengdu, and Chongqing, which are expected to contribute considerable revenue to the company in the next few years. Actively join forces with Poly to seek common military industry. On February 21, 2017, Dima Co., Ltd. announced a fixed increase plan. The company plans to issue shares to Weihai Poly and Poly Phase I, and plans to raise 1,073 billion yuan for new military special vehicle equipment projects and exoskeleton robot projects. The stock will be locked in for 36 months. If this offering is approved, based on an estimate of 6.29 yuan/share, Poly Technology will hold 6.59% of the company's shares, making it the second largest shareholder of the company. The new military special vehicle equipment project is an R&D, production and sales platform that the company is focusing on to meet the loading, storage, protection, biochemical safety and defense needs of the military's special weapons. Dima Co., Ltd. plans to invest 1,028 billion yuan (of which 727 million yuan) to build a new production line for this product. The exoskeleton robot project plans to invest 503 million yuan (of which 350 million yuan in capital raised) to build military and civilian exoskeleton robot production lines, etc. This product is mainly used in military, public safety, medical rehabilitation and other fields, and mainly assists in military logistics, fire rescue, medical rehabilitation for the elderly and the physically disabled. In addition, Dima Co., Ltd. has signed a “Strategic Cooperation Agreement” and a “Subscription Agreement” with Poly Technology Defense Investment Co., Ltd., and the company plans to invest 200 million yuan to become a partner of the Poly Defense Fund to work with Poly to explore and invest in high-quality military grade assets. We believe that the in-depth cooperation between Dima Co., Ltd. and Poly Technology is expected to effectively broaden the company's military resources, broaden the company's investment channels, and enhance the company's overall profitability. Introduce a restricted stock incentive plan to develop employees and the company together. On September 8, 2016, Dima Co., Ltd. launched the first restricted stock incentive program, awarding a total of 88.89 million restricted shares (3.79% of the total share capital) to 158 core personnel of the company and its subsidiaries. For the first time, 80 million shares were awarded at a price of 3.32 yuan/share. We believe that this equity incentive plan is conducive to ensuring the stability of the company's core team, fully stimulating the enthusiasm of the management team, improving the company's operating efficiency, and driving performance improvement. Profit forecast and rating: From 2017 to 2019, we expect Dima's net profit to be $934 million, $1,177 million, and $1,450 million, respectively, with corresponding EPS of 0.39 yuan/share, 0.49 yuan/share, and 0.60 yuan/share. We maintain a “buy” rating for Dima shares. Risk factors: Affected by local real estate regulation policies, real estate sales fall short of expectations; there is uncertainty about targeted increases; the industrialization process of exoskeleton robots falls short of expectations; and the benefits of the fund-raising project “New Military Special Vehicle Equipment Project” fall short of expectations.