1.35 billion yuan in cash purchased 15% of the shares of the graphene target, achieving a single-layer graphene low-cost mass production company announced in October 2016 that it would acquire 15% of the shares of the graphene target Hengli Shengtai with 1.35 billion yuan in cash. The target company promised a net profit performance of 500 million yuan, 600 million yuan, and 700 million yuan for 2016-2018. The controller of the target company is Dr. Zhang Bozeng. The AMI Company (Angstron Materials Inc.), which he founded, holds hundreds of patents in the US, 25 of which have been granted to the target company for domestic business. According to the company announcement, Hengli Shengtai has a low-cost mass production process for single-layer graphene, which is scarce in the world, and has many patents in the downstream application field of graphene, which is expected to achieve full coverage from graphene raw materials to applications. There are plenty of on-hand orders, and there are still considerable benefits under careful calculation. We estimate under a cautious scenario: not considering subsequent new orders, only considering the current 4 billion yuan order, which is currently in hand, is executed year by year according to production line investment and capacity release progress (the announcement at the end of 16 anticipates 200 tons of production capacity, 17-18 assumes that the progress of the new production line is slower than the company's announcement); assuming that the single-layer rate of graphene products rises from 60% to 70% (the company's official website claims 90%); assuming that the net interest rate of graphene products falls at a rate of 30% every year; assuming that the net interest rate is falling at a rate of 30% per year due to factors such as depreciation of the investment line and increased financial costs Decline every year 10% (net interest rate of 69% announced in January-August 2016). The target company is estimated to achieve net profit of 327,599,694 million yuan over the next three years, that is, if there is no major deviation between the target company's business model and information disclosure, there is still considerable profit under a cautious scenario, and it is close to the promised performance value. The majority shareholders increased their holdings by 200 million yuan in the past year, at a cost price of 12.94 yuan/share, demonstrating strong confidence that from December 2015 to January 2016, the company's controlling shareholders (6 times) and the chairman of the supervisory board (1 time) increased their holdings of the company's shares 7 times through the asset management plan, increasing their holdings at an average price of 13.15 yuan/share, of which the chairman invested about 200 million yuan. On November 8, 2016, Mr. Li Renchao, the controlling shareholder of the company, transferred 15,150,310 shares of the company held by the asset management plan through the Shenzhen Stock Exchange's bulk trading system, accounting for 2.05% of the company's total shares; the average transaction price was 12.94 yuan/share, and the transaction amount was 196.045 million yuan. The company's shares held officially rose from 21% to 23.05%. We believe that the majority shareholders have increased their holdings by a large amount within the past 12 months, and recently used cash to acquire graphene targets, which shows their strong confidence in the company's future development. Carefully measure the performance contribution of the current graphene target, maintain the “buy” rating, and maintain the “buy” rating. For the time being, we carefully measure the performance contribution of the current graphene target, and fine-tune the profit forecast according to the company's acquisition progress. It is estimated that the company will achieve net profit of 22,28,3.8 billion yuan in 16-18, corresponding to EPS of 0.29,0.38,0.51 yuan, corresponding to dynamic PE 47,36,27 times, and maintain the “buy” rating. Risk warning: The performance of graphene targets falls short of expectations, financial expenses are rising, progress in overseas general contracting falls short of expectations, competition in the domestic boiler market is intensifying, and large accounts receivable age poses the risk of asset impairment.