Incident: The company's performance in '16 fell 20.6% year on year, up 15.4% year on year in the 1st quarter of '17. The company released its annual report and quarterly report for '17. It achieved operating revenue of 622 million yuan, down 10.4% year on year, related to the decline in steering pump sales; realized net profit of 110 million yuan, down 20.6% year on year; EPS was about 1.10 yuan after full dilution. Among them, the company's fourth-quarter revenue and net profit to mother increased by 40.8% and 56.8%, respectively. In the first quarter of '17, we achieved revenue of 180 million yuan, an increase of 18.5% year on year, and realized net profit of 30 million yuan to mother, an increase of 15.4% year on year. The company's 16-year management expense ratio increased 5.6 percentage points to 14.2% year-on-year, mainly due to increased R&D expenditure. New products have entered the release period, and the company may have experienced two consecutive quarters of positive growth in the company's performance, mainly related to the increase in revenue of its new products, electrohydraulic pumps, transmission oil pumps, and automotive electronics products. Sales of the company's transmission oil pumps and EHPS electrohydraulic pumps increased by 191.3% and 7.7%, respectively, in 2016. In the second half of this year, orders for electrohydraulic pumps from an internationally renowned car company will begin mass production. In '17, the company's new products were further released, and the company may have reached an inflection point. With a multi-field layout, new businesses are yet to be implemented and blossomed. Under the major trend of electrification, the company is actively upgrading and transforming products to meet changes in product demand. We believe that the company's biggest focus in the future is electric pumps. Electric pumps are mechatronic hydraulic integrated products with high technical barriers, and the double increase in future penetration rate and bicycle value provides them with broad development space. We estimate that in the future, the company will lay out various fields such as automatic transmissions and braking systems through the electric pump business, and various new businesses will gradually be implemented and blossomed. The investment proposal company used to be a car steering pump faucet, and its profitability has remained at a high level for a long time. The company has a number of automotive electronics technology reserves. Upgraded product projects such as electric pumps are progressing smoothly, and internal generation growth is high. After the acquisition of CCI, the company will achieve endogenous and epitaxial two-wheel drive development. Regardless of the impact of the CCI acquisition, we expect the company's 17-19 EPS to be 1.32, 1.94, and 2.64 yuan, maintaining a “buy” rating. Risks suggest that the boom in the automotive industry falls short of expectations, industry competition exceeds expectations, and customer growth falls short of expectations.