Incident: The company announced on November 14, 2016, that the first phase of the company's employee stock ownership plan purchased a total of 4,084,912 shares of the company through secondary market bidding transactions. The transaction amount was RMB 78,483,972.20, and the average transaction price was 19.21 yuan. The number of shares purchased accounted for about 1.68% of the company's total share capital. As of the announcement date, the company has completed the first phase of the employee stock ownership plan stock purchase. Announcement comment: The participation of the executive team and core employees, and the guarantee of majority shareholders demonstrate confidence in the company's development. The first phase of the company's employee stock ownership plan is locked in for 12 months from November 14. The plan establishes priority shares and inferior shares according to a 1:1 ratio, of which employees raise no more than 40 million yuan of their own capital in the inferior share. Mr. Ma Zhenxin, the controlling shareholder of the company, guarantees the principal amount of the investment portion of the employees participating in the employee stock ownership plan. At the same time, Mr. Ma Zhenxin, the controlling shareholder of the company plans to provide joint liability guarantees for the implementation of priority shares in the pooled plan. Holders participating in the employee stock ownership plan include company directors, supervisors, senior managers and other core employees. There are no more than 120 people in total, including 7 company directors, supervisors, and senior managers, and no more than 113 other core employees. The employee stock ownership plan, with the participation of the executive team, wide coverage of core employees, and the guarantee of controlling shareholders and management in the company's long-term development, will enhance employee enthusiasm, enhance employee cohesion, and further strengthen the foundation of human resources security for the company's “Jinming Industry 4.0” and “Big Health” strategic goals. Join hands with giants to accelerate the pace of development of “Jinming Industry 4.0”. The company issued an announcement on November 10 to sign a “strategic partnership agreement” with Siemens. Siemens is a leading supplier of advanced industrial automation products and software in the world today. These continuously innovating products provide a good platform for fully integrated automation solutions and digital manufacturing. Joining hands with giant Siemens, the company will further accelerate the pace of development of “Jinming Industry 4.0” and achieve the strategic goal of becoming a leading enterprise in the global film blow molding industry. At the same time, we will further improve the customer structure, expand the company's influence in the global market, increase market share, and make more contributions to the improvement of the company's performance. Orders have increased significantly, and the quality of earnings has improved. According to the company's third quarterly report, due to the increase in the company's orders and the increase in procurement volume compared to last year, the company's prepaid accounts at the end of the third quarter increased by 86.39% compared to the beginning of the year; prepaid accounts increased by 53.75% compared to the beginning of the period, mainly due to an increase in prepayment for equipment from customers. Meanwhile, net cash flow from operating activities in the first three quarters was -74,800 yuan, a year-on-year decrease of 87.31%, and the quality of profit improved. Investment suggestions: We expect the company's net profit in 2016-2017 to be 55.44 million yuan and 63.39 million yuan, EPS is 0.23 yuan and 0.26 yuan, corresponding PE is 87.17 times and 77.12 times. Currently, the median PE (TTM, excluding negative values) in other special machinery industries is 135.89 times. The company's valuation still has some room to rise. Considering that the company's series of industrial layout centered on the “Jinming Industry 4.0” and “Big Health” strategies is progressing steadily, we maintain its “buy” investment rating. Risk warning: Downstream demand has declined, and the implementation of the company's “Jinming Industry 4.0” and “Big Health” strategies has fallen short of expectations.