Key investment points The company specializes in military cables and UHV wires (transmission cables and power optical cables), and has entered the field of communication optical fiber cables through the acquisition of Tongguang Information. All three businesses are facing rapid growth. UHV construction accelerated, driving the rapid growth of the company's transmission cable and power optical cable business: In 2016, the State Grid vigorously promoted the construction of two major UHV projects. UHV lines entered the peak construction period, and the construction of the “four transmissions and five straight” projects will continue until 2020. As a leader in special cables, the transmission cable and power optical cable business will enter a period of rapid growth. The company has an absolute technical advantage in the field of high-end equipment cables. Early pilots have been completed one after another, and equipment localization has directly benefited the company's performance: the company is one of the few domestic manufacturers that can achieve mass production of high-temperature, low-loss, and phase-stabilized high-end equipment cables. The products are mainly used in aerospace, missiles, radar and other fields. As the equipment localization process progresses, the company's equipment cable business will usher in rapid growth. The company acquired Tongguang Information in September 2016 and expanded its business into the field of communication optical cables. In addition to increasing performance, the participating subsidiary Jiangsu Sderet has an annual production capacity of 200 tons of optical rods, which will help reduce the company's raw material costs, enhance market competitiveness, and share the growth dividends brought by the boom in optical communications. Profit forecast and valuation: Benefiting from UHV construction, the company's special cables have ushered in a period of rapid growth; new military cable products have broken through, compounded by domestic replacement demand, and are expected to increase in volume. The company's performance is expected to grow rapidly, and we are optimistic about the company's future development. EPS for 2016-2018 is expected to be 0.42, 0.63, and 0.85 yuan, respectively. It is recommended to focus attention and cover the “gain” rating for the first time. Risk warning: The UHV approval process is delayed, and the communication optical cable business falls short of expectations;