Incident: The company published its report for the third quarter of 2016 on October 29, 2016. The company achieved operating income of 753 million yuan in January-September, an increase of 58.42% over the same period last year; realized net profit of 694.905 million yuan, an increase of 71.74% over the previous year. Looking at the third quarter alone, the company achieved operating income of 330 million yuan, an increase of 31.12% over the previous year; realized net profit of 33.212 million yuan, an increase of 12.10% over the previous year. The main reason for the increase in revenue was the company's acquisition of Huaxin Electromechanical in July 2015, which significantly improved the company's performance since then. Specifically, the company's consolidated gross margin in January-September was about 30.82%, a slight increase over the same period last year, while the consolidated gross margin for the third quarter was about 31.67%, down from the same period last year. The company confirmed certain asset impairment losses in the third quarter. From January to September, it caused asset impairment losses of about 27.8677 million, a significant increase over the same period last year. The main reason was the merger of the acquisition of Huaxin Electromechanical. At the same time, the company increased embedded software tax rebates, and non-operating income increased by about 11.841 million over the same period last year. The overall business situation of the company is stable. The company revealed in its quarterly report that the net profit returned to mother in 2016 is expected to increase by 23%-53% compared to last year. Lay out three-dimensional parking equipment and continue to promote upgrades. The company announced on May 24 that it has invested in the establishment of Amanohashi Tachiheng, targeting urban public parking solutions. It was also announced on July 22 that the holding subsidiary won the bid for the three-dimensional parking garage project. The project will have about 400 parking spaces, no less than 4 lift systems, and no less than 12 entrances and exits. The total amount of the winning project was 449.87 million. At average price, it is a high-end parking equipment, reflecting the company's strength in the field of three-dimensional parking garages. The promotion of this project and the development of Amanohashi Tachiheng are expected to gradually improve the company's performance. Optimistic about the company's layout in high-end equipment. Since 2015, the company has had an active layout around high-end equipment: acquiring Huaxin Mechatronics, broadening the variety and market of products, and improving the company's overall technical level; entering the wind power business for 14 years and producing stable results in 15 and 16; the company's subsidiary Eureko has leading domestic non-ferrous smelting ground equipment technology and has promising development prospects; the company lays out the new energy sector by investing in Inbol and participating in the Yipo New Energy Industry Investment Fund. The company's layout is in high-end equipment industries such as wind power, new energy, and three-dimensional parking equipment, and has gradually realized its performance and continuous transformation. We continue to be optimistic about the company's transformation and upgrading. Profit forecast. The company's performance is stable, and the various high-end equipment in the layout is progressing in an orderly manner, which is expected to continuously improve the company's performance. We expect the company's net profit to be 1.19, 1.49, and 172 million yuan in 16-18, corresponding to fully diluted EPS of 0.14, 0.18, and 0.20 yuan. Combined with the average valuation of comparable companies, we gave the company a price-earnings ratio of 42 times in 2017, a target price of 7.56 yuan, and an increase in holdings rating. Risk warning: There is a risk of market fluctuations, and the progress of transformation and upgrading does not meet expectations.