Incident: The company expects a year-on-year increase of 9.3%-20.8% in the first quarter of '17. The company released a performance forecast for the first quarter of '17. It is expected to achieve net profit of 28.5 million yuan to 31.5 million yuan in the first quarter of '17, corresponding to EPS of 0.27 yuan-0.30 yuan, a year-on-year increase of 9.3%-20.8%, mainly due to increased sales of new products such as the company's automatic transmission oil pumps. The company's performance has been growing for two consecutive quarters. The inflection point may be that the company is a leading enterprise in the automobile steering pump industry. Its main products are automobile hydraulic steering pumps. According to the company's 2016 performance report, due to the HPS used in some customer models being replaced by EPS, the company's main product, steering pump sales declined year over year, and fund-raising projects were not fully completed. In 2016, the company achieved revenue and net profit of 622 million yuan and 117 million yuan respectively, down 10.4% and 15.4% from the previous year. We believe that 2016 was a low point in the company's performance. According to the 2016 performance report, the company's performance in the fourth quarter of '16 doubled, and the performance in the first quarter of '17 maintained positive growth, and the company's inflection point was further revealed. The number of fund-raising projects is gradually increasing, and various new businesses are still waiting to be implemented and blossomed. Under the general trend of electrification, the company is actively upgrading and transforming products to cope with changes in product demand. The company has successfully developed products such as automatic transmission oil pumps, EHPS electro-hydraulic pumps, EPS motors, PEPS, etc. We expect the new business to gradually increase in volume in '17. In the future, with the implementation of various fund-raising projects, the company has broad room for growth. Furthermore, the company plans to acquire CCI, a German supplier of noise-reducing insulation system products, which is conducive to diversifying products, expanding the global market, and speeding up the company's internationalization process. The investment proposal does not consider the impact of the future acquisition of CCI. We expect the company's EPS in 16-18 to be 1.16, 1.33, and 1.87 yuan, corresponding to 55, 48, and 34 times PE in 16-18. The company is a leading automobile steering pump company. Profitability has remained at a high level for a long time, and the stock incentive plan is conducive to its long-term development. The company has a number of automotive electronics technology reserves. Projects for upgraded products such as electro-hydraulic pumps are progressing smoothly, and endogenous growth is high. After the acquisition of CCI, the company will achieve endogenous and epitaxial two-wheel drive development, and we will maintain our “buy” rating. Risks indicate that the growth of the main business falls short of expectations; the expansion of new projects falls short of expectations; and the risk of integration after the acquisition of CCI.