Leading domestic liquid food packaging equipment: Central Asia Machinery Co., Ltd. is a liquid product intelligent packaging equipment manufacturer integrating R&D, manufacturing and sales. It is mainly positioned to design and manufacture high-end liquid food packaging equipment. The products are widely used in the dairy, beverage, edible oil, condiments, daily chemicals and other industries, and has maintained long-term stable cooperative relationships with high-quality enterprises such as Danone, Mengniu, and Yili. The dairy packaging machinery market share ranked first among domestic peers in the past three years. Steady growth in performance and excellent profitability: The dairy industry has high technical barriers and high requirements for equipment sterilization treatment and product mechanical stability and reliability. The company's annual revenue comes from the dairy industry, and the comprehensive gross margin has remained at a high level of 45%-50%; in 2011-2015, the company's compound revenue growth rate was 21.88%, and the compound net profit growth rate was 18.05%; continued growth in 2016. The first three quarters achieved operating income of 476 million yuan, an increase of 9.17% over the previous year, achieving net profit 120 million yuan, an increase of 17.50% year over year. Downstream demand in the industry is strong, and there is plenty of room for the future: the domestic dairy beverage industry is developing rapidly, but the amount of milk and non-carbonated drinks per capita is far below the average of developed countries and the global average, and the product structure is gradually changing, which brings huge demand to the packaging machinery industry, which mainly focuses on customized products. According to Freedonia's forecast, the national demand for packaging machinery and equipment in 2016 was 40 billion yuan, of which the demand for dairy and beverage packaging equipment was 8.24 billion yuan, and will maintain a growth rate of about 10% over the next 5 years. Open up the entire industry chain and build a smart packaging equipment star: The company started in the pioneer packaging industry in the dairy industry, and gradually developed the ability to provide intelligent packaging solution systems through horizontal expansion to the liquid food industry, vertical expansion of the backstage packaging industry, and the establishment of “satellite factories” to provide packaging products services; in the future, as the degree of intelligence of packaging equipment increases and the localization rate increases, the company will continue to benefit and develop rapidly. First coverage, increased holdings: The company's main business is steady, the market space is large, and intelligent packaging equipment is developing rapidly. The company's net profit for 2016-2018 is estimated to be 1.69/2.04/236 million yuan, respectively, with a compound growth rate of 20.9%, corresponding EPS of 0.63/0.76/0.87 yuan respectively, corresponding to 2016-2018 PE of 64/53/46 times, respectively. The initial coverage gives an increase rating of 45 yuan, and the target price is 45 yuan. Risk warning: Downstream industry demand is reduced, customer concentration is high