High growth returned in 2016, and the results were in line with expectations. The results of the internationalization strategy highlighted that in 2016, the company achieved revenue of 1,599 billion yuan, a year-on-year increase of 57.28%, and net profit of 155 million yuan, an increase of 51.62% over the previous year, in line with expectations. Against the backdrop of a clear trend of price increases on the cost side in 2016, the company's gross margin increased by 0.65 pct year-on-year to 24.21% through improved efficiency and optimization of the customer structure. The company's internationalization strategy in 2016 showed results. Overseas revenue reached 203 million yuan, about 7.8 times that of 2015, but sales expenses and management expenses also increased by 202.97% and 33.72%. Supported by performance, the company will distribute a cash dividend of 1 yuan (tax included) to shareholders for every 10 shares, and use capital reserve funds to increase 8 shares for every 10 shares. At the same time, the company announced its 17Q1 performance forecast. The profit range was 336.85-41.695 million yuan, an increase of 15% to 45% over the previous year, in line with expectations. LED backlight quality is leading, comprehensive yield is high, and customer development has achieved remarkable results. The company is a domestic LED backlight leader. The comprehensive yield of backlight products reached 99.1% in 2016, achieving revenue of 1,088 billion yuan, an increase of 30.46% over the previous year. Thanks to improvements in technology such as small-sized backlights and high color rendering, the quality of the company's products has been more widely recognized. According to the annual report announcement, a number of well-known international customers in the industry are cooperating with the company, and at the same time, many high-quality international customers are making business contacts with the company. On the other hand, there is still a recent rise in the price of large panels. Local panel manufacturers plan to reduce shipments of 32 inch panels by 7 million in 2017. Under the influence of panel manufacturers expanding new production lines and increasing the proportion of large sizes, the rise in the average size of TV panels is expected to accelerate. We believe that the company's demand for large-size backlighting products will benefit from the increase in size and the trend of LCD industry centers shifting to the domestic market. LED lighting is booming, and the products have been recognized by the overseas middle and high-end markets. In 2016, the company's LED lighting achieved revenue of 195 million yuan, an increase of 89.60% over the previous year, and the overall product yield reached 98.9%. According to the logic described in “Structural Imbalance Revealed, Industrial Center Transfer Accelerated”, major international manufacturers withdrew from the Chinese lighting market one after another during 2016, providing more alternative space for the domestic LED lighting industry. At the same time, when LED lighting prices fall to the consumer's “comfort zone,” “good money drives out bad money” is occurring, market orders are being concentrated on large lighting companies, upstream chip manufacturers are starting to lean towards medium and large customers, and the market is showing a trend of consolidation. We believe that companies with technical and market advantages like Jufei Optoelectronics will benefit from this round of industry integration. Multi-point flowering: Optical films and small spacing have progressed smoothly. 2.5G optical devices have been supplied in small batches. In 2016, the company's production volume and sales volume of optical films increased by 57.45% and 66.38% year-on-year respectively; small-pitch LED products have been supplied in batches to major domestic display terminal manufacturers, and production capacity continues to expand. In addition, the 2.5G series “coaxial optical devices” developed by the company have been supplied in small quantities to domestic optical module manufacturers, and the 10G series is in the sample production stage. Brand dividends built on quality are gradually released, and the purchase rating is maintained! The company has always adhered to the business idea of refinement, strengthening, and further expansion, and insisted on optimizing product quality and expanding the variety of products. Considering the increase in cost rates brought about by the international strategy and the gradual implementation of the optical film business, we adjusted net profit to mother for 17-19 to be 211 million yuan, 295 million yuan, and 393 million yuan. We believe that the reasonable valuation range is 35-40X in '17, with a target price of 10.66 yuan to 12.19 yuan, and reaffirming the purchase rating! Risk warning: The growth rate of large backlight products is lower than expected, and the expansion rate of various new businesses is lower than expected.