Event: The company released its 16-year report, achieving revenue of 4.393 billion yuan, an increase of 3.18% over the previous year; net profit of 452 million yuan, an increase of 21.67% over the previous year. Compatible with EPS of 0.31 yuan. At the same time, the Q1 earnings forecast for '17 was released, achieving a net profit increase of about 15% over the same period last year. Comment: 1. The Q4 revenue growth rate improved slightly. Expenses and impairment losses affected the net interest rate company achieved revenue of 1,133 billion yuan in Q4, an increase of 0.48% over the previous year, reversing the downward trend in Q3 growth. Q4 achieved net profit attributable to the parent company of 97.46 million yuan, a year-on-year decrease of 4.15%. The company's automation rate increased, labor costs for the whole year decreased by 0.84 percentage points, and Q4 gross margin increased slightly by 0.19 percentage points. However, the company has strengthened incentives, and the management expense ratio and sales expense ratio have increased. Furthermore, Q4 impairment preparations have reached 79.23 million yuan, which is the main reason for the decline in Q4 net profit... 2. Revenue growth is expected to continue to rise in 2017, and profit is growing steadily at the same time. The company expects Q1 net profit to increase 15%. We estimate that Q1 revenue growth rate may be within the 10%-15% range, achieving 2 consecutive quarterly revenue growth rates. The company's own product cycle is quite obvious, or it may start an upward cycle where revenue growth is gradually increasing, and annual revenue may grow by 20%-25%. The increase in the company's automation rate, the gradual decline in the share of labor costs, and the decline in the cost ratio hedge the pressure on the increase in the cost of components such as packaging materials and hardware to a certain extent, but it still affects the level of profit margins. Although the company's 17-year profit target is 467 million yuan, we expect to exceed expectations as a probable event, maintaining 15-20% growth throughout the year. 3. LED lighting has gradually entered the integration stage. The company has long benefited from increased industry concentration and overseas expansion, and the concentration of the LED lighting market has been low. As the industry develops, integration will accelerate, and the number of enterprises may decrease by 45% in the next 5-8 years. The cost advantages brought about by the size of leading enterprises and the advantages of management efficiency will play a key role in this stage, and leading enterprises represented by the company will benefit from increased industry concentration over the long term. In addition, after a long period of intense competition, China has become a global LED innovation driving base, and advantageous enterprises have gradually implemented overseas channel layout. The company has initially achieved layout in Europe, America, Oceania, Africa and other places. In the future, it will further improve the global brand and channel network, occupy overseas exports, achieve the company's long-term steady growth, valuation and investment recommendations. We have adjusted the 17-19 net profit forecast of 5.20/6.48/773 billion yuan, corresponding to 0.36/0.45/0.53 yuan. The current stock price corresponds to 20 times in '17. The valuation is relatively low, and remains highly recommended ratings. The risk indicated a sharp drop in prices, and business expansion fell short of expectations.