Incident The Company Releases 2016 Annual Results Forecast On January 23, the company released the 2016 annual results forecast. Net profit attributable to shareholders of listed companies is estimated to be 150 million yuan to 170 million yuan, up 273%-323% from the same period last year. Briefly, growth in the fourth quarter was limited, and the company's overall performance growth in the fourth quarter was limited due to the slump in Xinko's short-term operations. The main reason is that during the quarter, Xinko Electronics experienced a sharp decline in short-term performance due to the LeTV mobile phone incident. It is expected that Xinko will experience a certain loss in the single quarter. In the fourth quarter of '16, Xinko already introduced a large number of new customer orders, but it will still take some time for the production capacity of the new models to climb. In line with market changes, Xingke Electronics is actively developing new customers and products. As the product slope stabilizes, profit levels will gradually increase. It is estimated that the overall profit level of Sinke Electronics in '17 will be a good improvement from '16. The main chemical business is growing relatively well, and the company's main chemical business is expected to significantly improve the company's main chemical business year on year. After the production capacity of the new base in Suzhou was gradually released in 2016, operations became more normalized, and the cost reduction and bargaining power increased brought about by the scale effect, creating a new profit driving point. As fund-raising projects are put into operation, project benefits and promised returns are gradually declining. The overall operation of the company's chemical business improved in '17, and profits are expected to increase significantly over the same period last year. The profit forecast and rating valuation are calculated based on the additional share capital after issuance. We forecast the EPS for 2016-2018 to be 0.698, 0.942, and 1.244 yuan, respectively, and the corresponding PE is 25X, 19X, and 14X. The valuation is less than 20X based on the 17-year exam preparation profit. Compared with the company's valuation and growth, similar companies still have long-term investment value and maintain a “buy” rating.