Investment points: The company specializes in spinning, yarn-dyed, printed and dyed fabrics, shirts, knitted yarn, knitted fabrics, home textiles, etc. The production capacity of cotton yarn is 210,000 ingots (self-supply ratio is about 50%), the annual production capacity of yarn-dyed cloth is 160 million meters, printing and dyeing cloth, 11 million pieces of shirts (8 million pieces in Haian, 3 million pieces in Cambodia), the production capacity of knitted yarn and knitted cloth is 6,000 tons each, and the production capacity of home textile fabrics is 30 million meters. The focus of future production capacity expansion will be in Ethiopia, Africa. At the end of 2016, the company signed a cooperative agreement with the Ethiopian government represented by the Investment Committee and China Civil Engineering Group on the development of the textile and garment industry in Dire Dawa. The company plans to expand the entire industry chain from spinning and fabric to clothing (excluding the embossing process) in the local industrial park, and plans to first build some production capacity for yarn-dyed fabrics and garments to test the waters. The project has a provisional investment scale. The land is 90 hectares, the dyed fabric factory is expected to have a monthly production capacity of 2.5 million meters, the yarn-dyed fabric factory is expected to have a monthly production capacity of 2.5 million meters, the garment factory is expected to have a total monthly production capacity of 3 million pieces, and the spinning mill is expected to scale 200,000 ingots. The Ethiopian government has plans to turn Dire Dawa into a domestic light manufacturing center, and the China-Turkey Group's Dire Dawa Industrial Park will no longer accept other factories in the same industry (woven fabric factories and spinning mills) in the first and later stages. Due to the shift in production capacity from downstream customers, in order to drive the development of supporting industries, it is expected that the company will be given a large degree of order support for African production capacity. The implementation of the Ethiopian investment plan is conducive to further speeding up the pace of the company's overseas investment and seeking close cooperation with foreign strategic customers. The company plans to develop environmentally friendly new energy as its second main business in the future. Future investment directions may include environmental protection projects such as straw power generation, biomass power generation, sewage treatment, solid waste treatment, and hazardous waste treatment. Lianfa Environmental Renewable Energy Company has an annual net profit of about 60 million yuan. Revenue mainly comes from electricity, steam, sewage treatment, etc., and external steam supply accounts for about 8% (the rest is for personal use). Currently, the 5.1MW distributed photovoltaic power plant project is being implemented. With the company's leading management experience, cost control advantages and technical reserves, it is expected to lay the foundation for future expansion of park supporting businesses such as thermal power, sewage treatment, and steam supply. 1) The company mainly exports (export sales of yarn-dyed fabrics account for 75%), and the depreciation of the RMB favors a relative rise in order prices. Coupled with the effectiveness of product structure upgrades, the gross margin for each quarter has maintained month-on-month and year-on-year growth. 2) The original processing orders for home textiles and printed and dyed fabrics have gradually been converted to self-operated orders, and the company's production capacity is expected to be fully released; on this basis, the increase in the scale of spot fabrics, transit trade business, and textile materials trading centers (intermediary business, financing services) is expected to continue to contribute revenue. 3) Actively lay out overseas manufacturing bases, promote the expansion of the entire industry chain, concentrate production capacity in key technological processes, and achieve delivery and cost advantages under resource integration. 4) The continuing effects of factors such as the strong profitability of thermal power companies that have completed equity acquisitions, Lianfa Tianxiang Printing and Dyeing, and Lianfa Lingcai's gradual loss reduction, are expected to achieve net profit of 3.68, 4.25, and 489 million yuan in 2016-18, an increase of 24.92%, 15.45%, and 15.20%, corresponding to EPS of 1.14, 1.31, and 1.51 yuan respectively. Referring to the valuation levels of relevant textile enterprises, the company was given a purchase rating of 15xPE in 2017, with a target price of 19.68 yuan. Major uncertainties: raw material prices, exchange rate fluctuations, underdevelopment of overseas production bases, etc.