Main opinion 1. Focus on the field of motion control. During the reporting period of rapid growth in the company's performance, the company's revenue increased 10.33% year on year. The main reason was that the company was guided by market demand, continuously increased investment in R&D and promoted product upgrades, and the company's production and operation progressed steadily; net profit attributable to shareholders of listed companies fell 14.17% year on year, mainly due to a 14.03% increase in management expenses. 2. The machine tool market changes gears, and the company's performance is expected to grow steadily. Currently, China's machine tool market demand has entered a period of structural shift upgrading. Market demand is evolving in the direction of automation, complete package, and customized customization. In particular, the promotion of Industry 4.0 and Intelligent Manufacturing in China 2025 will enable China's machine tool industry to show a prosperous growth trend in the future. The company is a well-known brand enterprise in the domestic motion control industry. It is one of the few domestic companies that have mastered both motion controller CNC systems and servo drive technology. The company takes “professionalism, concentration and focus” as the core business philosophy. In addition to taking motion control system products as the core, expanding competitive advantage, and expanding categories and brands, the company will also continuously improve the quality of the company's products, rely on independent innovation to improve the core competitiveness of products and companies, promote the development and improvement of various series of products, and expand the breadth and depth of application fields, and will take the lead in benefiting from manufacturing upgrading. 3. Investment advice: The company's net profit for 17-19 is estimated at 58 million yuan, 76 million yuan, and 97 million yuan, corresponding EPS is 1.02 yuan, 1.34 yuan, and 1.70 yuan, and the corresponding PE is 49X, 37X, and 29X. Maintain recommended ratings. 4. Risk warning: Market competition intensifies the decline in gross margin.