Investment points: The first domestic enterprise with independent intellectual property rights and complete production processes to solve the problem of high heat dissipation in electronic products. Since its establishment, it has focused on the development, manufacture and sale of high thermal conductivity graphite heat dissipation materials. In 2016, the company achieved operating income of 466 million yuan, up 41% year on year; net profit attributable to parent company shareholders was 82.34 million yuan, up 51% year on year; based on the rapid expansion of the global smartphone market, sales volume in 2016 was 2.54 million square meters, up 96% year on year, and gross margin remained at a high level of 30%. National policies support the development of the new materials industry. Graphite films with high thermal conductivity belong to the new materials industry, and technical barriers and supplier certification barriers are high. 1) The thermal conductivity of high thermal conductivity graphite film can reach tens of times that of ordinary products, and it will be a heat dissipation material widely used in the electronics industry in the future. 2) As a technology-intensive new materials industry, the 2017 government work report stated that the development of the new materials industry should be accelerated. 3) High thermal graphite film technology barriers and supplier certification barriers are high. The company has now obtained certification from many well-known domestic and international smartphone and tablet manufacturers such as Samsung, Huawei, VIVO, and OPPO. Demand for downstream consumer electronics products is cooling off vigorously, driving the development of the industry for the better. 1) There is a clear trend of intelligent, ultra-thin, and large-screen consumer electronics products. Heat dissipation is a key issue and will increase the application ratio of high thermal conductivity graphite films. 2) Smartphones are rapidly becoming popular, the growth rate of new markets continues to rise, and the share of domestic mobile phones in the global market is rising. The three major domestic brands accounted for 21% of the global market in 2016, and global smart phone shipments are expected to reach 1.56 billion and 1.77 billion in 2017 and 2018. 3) Shipments of ultra-thin laptops, tablets, and wearable devices are expected to reach 57 million units, 455 million units, and 96.23 million units in 2017, and demand for cooling is strong. The total demand for high thermal conductivity graphite films is estimated to be 1182/12.72 million square meters and 2567/27.37 million square meters in neutral and optimistic conditions from '17 to 18, respectively. Among them, in '17, demand for high thermal conductivity graphite heat dissipation films for smart phones alone was conservatively predicted to reach 6.22 million square meters, and optimistically estimated to exceed 10 million; the company's production digestion was not a problem. Based on the average price of high thermal conductivity graphite film of 215 yuan per square meter, the market size of high thermal conductivity graphite film is estimated to be about 5.5 billion yuan under optimistic conditions in 2017. The company now plans to issue 52 million shares, raising a net capital of 350 million yuan for 1) relocation and expansion projects (290 million): The construction period of the relocation and expansion project is 36 months, and after delivery, it will form a production capacity of 2 million square meters per year. 2) R&D center projects (60 million): The company currently has 48 patented technologies. The R&D center project will further enhance the company's scientific research and innovation capabilities. Considering that the quality of the company's products is on par with international standards, that customers are bound to Samsung, Huawei, OPPO, and VIVO, etc., and that domestic brands are rapidly rising, demand for the company's graphite cooling film is increasing, there is still a certain gap between the price-earnings ratio and the industry average (about 48 times), and that future production capacity expansion can better meet downstream demand for smartphones, ultra-thin notebooks, tablets, etc., it is expected that net profit attributable to the owners of the parent company will be 8950/9337/9936 million yuan respectively in 17-19, considering the full dilution of EPS after IPO It is 0.43/0.45/0.48 yuan. Comparing the situation of comparable A-share companies in the same industry, we gave the company 40 to 45 times 17 years, corresponding to a reasonable market value and price range of 35.8 to 4 billion yuan, 127 to 19.4 billion yuan. Special Reminder: The IPO pricing predicted in this report is not the price performance on the first day of listing, but rather a reasonable price range when the current market environment remains largely unchanged.