Event: In 2016, the company achieved operating income of 668 million yuan, operating profit of 226 million yuan, and net profit of 187 million yuan, year-on-year increases of 11.67%, 31.85% and 15.16%, respectively, and achieved an EPS of 0.36 yuan. In 2016, 23,800 tons of zinc concentrate and 27,900 tons of lead-antimony concentrate were produced, with year-on-year increases of 7.8% and 10.89%, respectively. Core point of view: volume and price have risen sharply, costs have been reduced, and performance has increased. The company is mainly engaged in the production and sale of zinc concentrate and lead-antimony concentrate. The sales volume of lead and antimony concentrate was 22,300 tons, up 8.59% year on year. The average price of lead and antimony concentrate containing silver increased 13.64% from last year, and the volume price rose sharply, contributing 137 million dollars in gross profit. Zinc concentrate production was 23,800 tons, up 7.8% year on year. Although there was a decrease in sales volume, the cost of zinc concentrate was drastically reduced. The average price of zinc concentrate increased by 22.86% over last year, and prices increased and decreased, contributing 313 million dollars in gross profit. Raise capital to invest in renovation and expansion to help increase production. The company will raise 230 million yuan to invest in the zaxikang lead-zinc mine renovation and expansion project, with a design capacity of 600,000 tons. It is expected that all of it will be completed and put into operation in '17. At the same time, the company will accelerate cooperation and mergers and acquisitions with directly producing mining enterprises to further increase its storage and expansion capacity. In 2017, the company continued to be optimistic about the business situation, and the planned mining volume increased to 700,000 tons. Metals prices are expected to continue to rise. Although zinc supply increased in 2017, there is still a gap between supply and demand, and zinc prices will remain high. The environment continues to be tightened, and the supply side of lead is clearly limited, which is conducive to the recovery of lead prices. At the same time, affected by environmental protection, the operating rate of antimony mining enterprises continued to decline, shutdowns and production cuts gradually increased, and the overall improvement in industry supply and demand conditions contributed to the rise in antimony prices. Antimony prices have risen by more than 76% since the low in 2016. Give a “buy” rating. The company's EPS for 17-19 is expected to be 0.65 yuan, 0.79 yuan, and 0.96 yuan, respectively, and PE corresponding to the current stock price is 42 times, 34 times, and 28 times, respectively, maintaining the “buy” rating. Risk warning: The price increase of zinc, lead, and antimony fell short of expectations, and the progress of construction projects fell short of expectations, etc.