Incident: In order to meet the needs of the company's strategic transformation and development, Kuangda New Energy, a wholly-owned subsidiary of the company, signed an “Investment Framework Agreement” with Fulin Industry and Trade, Fubon Electric, and Fuwo Electric. The company plans to invest no more than 400 million yuan in cash acquisitions, and will directly or indirectly own 100% of the shares in the three companies. Key investment points: The target company's products have been recognized by international first-tier enterprise customers, and future revenue is expected to continue to grow. The investee has been engaged in R&D, production and sales of automobile motors for more than 12 years. The products have passed strict certification from international first-tier auto parts assembly plants, the production quality and development capabilities have been widely recognized by customers, and participated in early project research and development for some customers. More than 95% of the company's products are sold to major European auto parts assembly plants. It indirectly supplies products to many internationally renowned automobile manufacturers. Thanks to the growing demand in the industry and the development of new market customers, it is expected that the investors' income and profit will continue to grow in the future. This acquisition is in line with the company's strategic transformation plan and supports the core automotive parts business with mutual advantages. Kuangda Technology's strategic plan has clearly identified auto parts as one of the new strategic footholds. The company will gradually realize the continuous upgrading and transformation of the company from automotive fabrics to automotive accessories and auto parts. Through cooperation with the investee, we can not only make better use of the investee's strengths in product development and production quality control in the automotive micromotor field, but also make better use of the domestic automotive OEM customer resources accumulated by Kuangda Technology in automotive fabric trim and the strong financing capabilities of listed companies to complement each other's advantages and strengthen and expand the new automotive core component business segment represented by motor electronic control. Control the scale of the photovoltaic business and adjust the focus of the new energy business. Up to now, the total number of the company's grid-connected photovoltaic power plants is 410 MW. Due to issues such as power restrictions and delayed subsidies, this scale will remain stable in the future. In addition, the company cancelled three early photovoltaic power plant project companies located in Xinjiang. In the future, the company's new energy business will focus on developing companies from electricity to automotive parts, especially new energy vehicles. The majority shareholders' increase price and fixed increase price are close to current prices, and the margin of safety for stock prices is high. The majority shareholders increased their holdings by more than 115 million yuan, increasing their holdings at an average price of 5.60 yuan/share, and promised not to reduce their holdings for 12 months. On January 18, 2016, the actual controller of the company proposed that employees increase their holdings of the company's shares and promised to fully reimburse those who met the conditions for the stock price or loss; the adjusted cost for employees to increase their holdings during the period is estimated to be about 5.48 yuan/share. The fixed increase of the company was completed on November 6, 2016. The fixed increase price was 6.52 yuan, and the net capital raised was 1.15 billion yuan. The company currently has sufficient capital to support subsequent development. Maintaining profit forecasts and investment ratings: Regardless of the performance contribution of the subject of the acquisition, the company's net profit for 16-18 is estimated to be 3.21, 4.54, and 471 million yuan, respectively. The earnings per share after full dilution are 0.20 yuan/share, 0.29 yuan/share, and 0.31 yuan/share, respectively. The PE corresponding to the current stock price is 31 times, 23 times, and 21 times, respectively. Keep the “Overweight” rating unchanged.