Key investment points: The first domestic enterprise with independent intellectual property rights and a complete production process to solve the problem of high heat dissipation of electronic products. Since its establishment, it has always 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, an increase of 41% year on year; net profit attributable to shareholders of the parent company was 82.34 million yuan, an increase of 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 high at 30%. National policies support the development of the new materials industry. High thermal conductivity graphite film belongs to the new materials industry, and technical barriers and supplier certification barriers are high. 1) The thermal conductivity of graphite film with high thermal conductivity 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 points out that the development of the new materials industry will be accelerated. 3) High heat 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 strong and dissipates heat, driving the development of the industry for the better. 1) There is a clear trend of intelligent, ultra-thin, and large screens in consumer electronics products. Heat dissipation is a key issue, which will increase the application ratio of graphite films with high thermal conductivity. 2) Smartphones are rapidly becoming popular, the growth rate of new models continues to rise, and the share of domestic mobile phones in the global market is increasing. The three major domestic brands accounted for 21% of the global market in 2016. 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 wearables 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 graphite films with high thermal conductivity is estimated at 1182/12.72 million square meters and 2567/27.37 million square meters from 17 to 18 under neutral and optimistic conditions, respectively. Among them, demand for high-conductivity graphite heat dissipation films for smart phones alone was conservatively predicted to reach 6.22 million square meters in 2017, and the optimistic estimate was over 10 million; the company's production and 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 plans to issue 52 million shares and raise a net capital of 350 million yuan for 1) relocation and expansion projects (290 million yuan): The construction cycle of the relocation and expansion project is 36 months, and after delivery, it will generate an annual production capacity of 2 million square meters. 2) R&D center project (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 comparable to the international level, with customers tied to Samsung, Huawei, OPPO and VIVO, etc., and the rapid rise in demand for the company's graphite cooling film, there is still a certain gap between the listing price-earnings ratio and the industry average (about 48 times), and future production capacity expansion can better meet the downstream needs of smartphones, ultra-thin notebooks, tablets, etc., and the net profit attributable to the owners of the parent company is expected to be 898950/9337/99.36 million yuan respectively after the IPO. It was 0.43/0.45/0.48 yuan. Comparing the situation of comparable companies with A-shares in the same industry, we gave the company 40 to 45 times in 17 years, corresponding to a reasonable market value and price range of 3.58 to 40 billion yuan, 17.2 to 19.4 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 with the current market environment basically unchanged.