The predicted profit turned a year-on-year loss into a profit. The company announced that net profit was 5.3 to 590 million yuan in 2016, and the year-on-year loss was turned into a profit. Key points of focus The company turned a loss into a difficult profit: 1) In 2015, the company lost a huge loss of 1.98 billion yuan and fell into a business crisis. 2) The company reversed losses in 2016. Considering the assessed value of assets of 244 million dollars, the company is basically close to the break-even point, but it is also superior to the operating situation in 2015. Both white light and color TV improved markedly in 2016:1) In 2015, the subsidiary Meiling Electric made a profit of only 0.3 billion dollars, which was lower than expected. Profitability levels returned to normal in 2016. 2) In 2016, the color TV industry was fiercely competitive, and panel costs continued to rise. Although the market share of Changhong Color Television's shipment volume declined, there were no operating losses in this context, and the quality of operations improved. Cost pressure in 2017: Although the upward pressure on panels faced by color TV in 2017 was eased, there was a lot of upward pressure on the raw material costs of white light. Since the company's refrigerator is positioned as a second-tier brand, its ability to raise prices is weaker than that of first-tier brands. Furthermore, the company's compressor company Huayi Compression has also contributed to steady profits in the past. However, in the industrial chain, the premium capacity for accessories is not as good as that of brand companies, and the profit pressure caused by rising costs in 2017 is not small. The valuation and recommendations were raised by 19% and 9% of the 17/18 EPS to 0.09, 0.10 yuan. The EPS for 16/17/18 is expected to be 0.12, 0.09, and 0.10 yuan, respectively. Maintain a neutral rating and maintain the target price of 4.5 yuan. Risk market competition risk; risk of rising raw material costs.