Investment highlights: Performance growth of 94.96%. Yufu Co., Ltd. released its 2017 quarterly report. During the reporting period, the company's revenue was 860 million yuan, up 96.52% year on year, and achieved net profit of 41 million yuan, up 94.96% year on year, achieving EPS of 0.10 yuan. The company also expects the company's net profit of 100 million to 133 million yuan from January to June 2017, an increase of 50%-100% year on year. The reason for the increase in performance: (1) due to the combined performance of Intelligent Aviation New Energy. (2) The revenue and gross profit of the company's polyester industrial yarn products increased to a certain extent compared to the same period last year. Prices and price differences of polyester industrial yarn have rebounded. Since this year, it has benefited from a recovery in downstream demand, and polyester companies have also rebounded in prices and price spreads. According to data from China Fiber Network, the average price of polyester industrial yarn from January to March this year was 1,1820 yuan/ton, up 38.26% year on year. The price difference was 4,239 yuan/ton, up 42.06% year on year. At the same time, according to the company's annual report, in 2017, the company will accelerate the construction of a fund-raising project — a ceiling film project with an annual output of 40,000 tons, speed up the pace of project infrastructure construction, increase product research and development efforts for new projects, and strive for the project to be effective as soon as possible. Epitaxial enters the NEV industry chain. In the fourth quarter of 2016, the company successfully acquired 51% of the shares of Intelligent Aviation New Energy and expanded into the NEV industry chain. Zhihang New Energy is a new energy enterprise specializing in the design, R&D, production, sales and service of ternary power lithium batteries for new energy vehicles, and has a complete production line for ternary cathode materials, batteries and PACK systems. The shareholders of Zhihang New Energy promised that the net profit of Zhihang New Energy in 2016 to 2018 was 136 million yuan, 380 million yuan and 420 million yuan respectively. The new energy industry chain will lay the foundation for the company's rapid future development. The actual controller change brought new development opportunities to the company. In April 2016, Mr. Mao Huixin, the original actual controller of the company, transferred 29.8% of Yufu's shares indirectly held by Huzhou Youfu Holdings Co., Ltd. to Suzhou Zhengyue Investment Management Co., Ltd. in a price agreement of 1,896 billion yuan. After the share transfer was completed, Mr. Mao Huixin no longer holds shares in Yufu Holdings. The actual controller of the company has changed from Mr. Mao Huixin to Mr. Jiang Yong. Mr. Jiang Yong indirectly holds 29.8% of the listed company's shares through Youfu Holdings. Suzhou Zhengyue and Mr. Jiang Yong participate in holding companies such as Yifan Finance, Fulin Network Technology, Pet Network Technology, Departure Information Technology, Shang Entertainment Network Technology, Siddhi Media Culture, and Luna Culture Communication. The change of actual controller will bring new development opportunities to the company. Covered for the first time, a “gain” rating was given. The company successfully entered the NEV industry chain, and the recovery in polyester industrial yarn prices and price differences will enhance the company's performance. We expect the company's EPS to be 0.77 yuan, 0.99 yuan, and 1.27 yuan respectively in 2017-2019, giving the company 39 times PE in 17 years, corresponding to a target price of 30.03 yuan. The first coverage will give it an “increase in weight” investment rating. Risk warning. Risk of fluctuations in raw material prices, risk of falling product prices.