The company released the 2016 annual report. The company achieved operating income of 7.585 billion yuan in 2016, an increase of 3.10% over the previous year; net profit attributable to listed companies was 220 million yuan, which significantly reversed losses over the previous year; achieved earnings of 0.10 yuan per share, reversing the loss year on year; and the performance was basically in line with expectations. Cut costs and save money, and greatly improve profits. The company is mainly engaged in the production and sales of premium steel, with an annual output of about 3.2 million tons of premium steel. Its products include automotive steel, construction machinery steel, railway steel, spring steel, bearing steel, marine anchor chain steel, high pressure pipe billet steel, etc. During the reporting period, through optimizing marketing strategies, the company's revenue increased positively year-on-year for the first time since 2012, with an increase of 3.10%. Through internal cost reduction and efficiency, gross sales margin reached 7.35 percentage points to 11.72% year on year; operating profit of 570 million yuan was achieved during the reporting period, a significant improvement over the 2015 loss of 120 million yuan. Optimize supporting technical reforms, maintain competitive potential, and continuously promote technological transformation and upgrading of production lines to enhance the competitiveness of the company's products. During the reporting period, the company's UTO Steel product structure adjustment and upgrading project had an annual production capacity of more than 800,000 tons of large round billets of φ450-800mm special steel. The project has become a new economic growth point for the company. The company's newly put into operation of the φ12-60mm silver bright material joint flaw detection line has been completed throughout the line, and the flaw detection capacity can reach 30,000 tons/year, greatly improving product quality and grade. Lay out “Internet +” to promote transformation and upgrading. In terms of transformation and upgrading, the company lays out IDC services for server hosting, leasing, operation and maintenance, and network access services. The company and Jiangsu Zhiqing Investment Management Co., Ltd. jointly initiated and set up a merger and acquisition fund to invest in the IDC industry to promote the company's global IDC industry strategic layout, cooperate with domestic and foreign partners in planning, development, construction, operation and management of IDC projects, and achieve transformation and development. Performance improvement, maintaining the “increase in holdings” rating. With the balance ratio of the entire industry as high as 70% or more, the company's balance ratio in 2016 was only 38.48%. The high-quality balance and liability structure enhances the ability of the company's main steel business to survive the winter, and at the same time facilitates the company's transformation and upgrading, actively lays out the IDC business, and cultivates new profit growth points. The company's revenue in 2017-2019 is expected to be 8, 86, and 9 billion yuan, and EPS is 0.13, 0.17, and 0.19 yuan, respectively, corresponding to PE of 122, 93, and 83 times. Maintaining an “incremental” rating risk warning: price fluctuations exceed expectations, downstream demand falls short of expectations, and policy changes fall short of expectations.