Key investment points: pilot demonstration enterprise for intelligent manufacturing of green tires. The company's tire products are mainly all-steel radial tires and semi-steel radial tires. Among them, all-steel radial tire products are the main ones. Since the second half of 2014, the company has actively explored new business models, promoted market transformation and upgrading on the basis of the original tire and machinery business fields, and implemented the “Mobile Star Monkey Strategy”. Among them, the “Double Star Environmental Protection Relocation, Transformation and Upgrading Green Tire Intelligent Demonstration Base - High Performance Radial Truck and Bus Tire Project (Phase I)” was completed and ready for use at the end of May 2016. After a period of trial operation, it was officially put into operation in July 2016. An “Industry 4.0” intelligent chemical plant for passenger tires is under construction. In 2016, Shuangxing was rated by the Ministry of Industry and Information Technology as the only “green tire intelligent manufacturing pilot demonstration enterprise” in the tire industry. The 2016 annual performance forecast issued by the company showed a profit of 91.8971 million yuan to 110,2765 million yuan, an increase of 50%-80% over the previous year. An industrial merger and acquisition fund was set up, and Kumho Tire's debt concession was selected as a priority negotiation target. The 2016 Third Extraordinary General Meeting of Shareholders deliberated and passed the “Proposal on the Company's Intent to Participate in the Establishment of Industrial M&A Funds and Related Transactions”, agreeing that the company would invest RMB 900 million to jointly initiate the establishment of the Qingdao Xingwei Equity Investment Fund Center (limited partnership) with Qingdao Guoxin Capital Investment Co., Ltd., Qingdao International Investment Co., Ltd., Qingdao SDIC Dehou Investment Management Co., Ltd., and Qingdao Guoxin Innovation Equity Investment Management Co., Ltd. It mainly invests in domestic and foreign tires, automobiles, and upstream and downstream related industries to seek opportunities for mergers and acquisitions in the above industries. On January 18, 2017, Qingdao Xingwei International Investment Co., Ltd., a subsidiary of Qingdao Xingwei Holdings, received a notice that it was selected as a priority negotiation target for the “Korea Kumho Tire Co., Ltd. Creditor Sale of 42.01% Shares Project”. Relocate, transform and upgrade to build a demonstration base for green tire industry 4.0. On August 25, 2016, the company issued a non-public development plan. The total amount of capital to be raised is not more than 900 million yuan. After deduction of issuance fees, it will be used for the Double Star Environmental Relocation, Transformation and Upgrading Green Tire Industry 4.0 Demonstration Base High Performance Passenger Vehicle Radial Tire Project (6 million sets of semi-steel radial tires) and the Double Star Environmental Protection Relocation, Transformation and Upgrading Green Tire Intelligent Demonstration Base Automated Manufacturing Equipment Project (Phase I). Through relocation, the production process and performance indicators of the company's tire products and tire manufacturing equipment products will reach international advanced levels, which is conducive to comprehensively improving the production scale and R&D capacity of the company's tire products and tire manufacturing equipment products, further optimizing the company's product variety structure, promoting the company's industrial restructuring, transformation and upgrading, enhancing the company's core competitiveness in domestic and foreign markets, and enhancing the company's position in the industry. Profit forecast and valuation range. We expect the company's net profit from 2016 to 2018 to be 99 million yuan, 139 million yuan, and 188 million yuan respectively, up 61.87%, 39.82%, and 35.64%, respectively. The diluted EPS is 0.15 yuan/share, 0.21 yuan/share, and 0.28 yuan/share, respectively. Referring to the valuation level of tire companies in the same industry, the company was given 45 times PE in 2017, with a target price of 9.45 yuan within 6 months, covering the first time, a “increase in holdings” rating. Risk warning: risk of large fluctuations in rubber prices; risk of international trade friction.