The increase in performance is in line with expectations, and Easytech announced its 2016 1-3Q results: operating income of 3.762 billion yuan, up 49.5% year on year; net profit attributable to the parent company was 271 million yuan, up 44.5% year on year, corresponding to profit of 0.47 yuan per share. Performance growth is in line with expectations. The gross margin decreased by 1.3 ppt year on year, mainly due to the increase in revenue share of PV system integrated products with low gross margin. The sales expense ratio decreased by 1.6 ppt year on year, mainly due to a sharp increase in revenue scale. Financial expenses increased 252% year over year, mainly due to increased interest on loans. Net cash flow from operating activities decreased by 60.3% year-on-year, mainly due to an increase in prepaid purchases. Development trends Inverter sales and photovoltaic power generation revenue jointly drive high performance growth in the photovoltaic sector. In the first three quarters, PV system integration product revenue was 2,862 billion yuan, and power plant revenue was 52.95 million yuan. The fourth quarter will maintain high growth. The company's fixed capital increase has been put in place, and nearly 230MW photovoltaic power plants have been connected to the grid. The company continues to increase investment in the photovoltaic sector, carry out share acquisitions and capital increases in subsidiaries, and actively expand overseas regions. The PV sector's performance will continue to grow. High-end power and data center businesses are growing steadily. The company's high-end power supply, data center, charging equipment and energy storage business achieved a total revenue of 843 million yuan. The rail transit sector continues to contribute profits to the UPS business. In addition, the company invested 300 million yuan to invest in Guofu Guangqi. The agreement stipulated that Guofu Guangqi would purchase equipment from the company in IDC computer room construction at least 200 million yuan in 2016, and a total of not less than 2 billion yuan over the next five years, guaranteeing the company's performance growth. Sales of charging devices are expected to be low, and 2017 will be the starting point for high growth. Affected by the industry environment, production and sales of new energy vehicles are low, and investment in charging facilities is slowing down. The company's charging pile sales are expected to resume high growth as electric vehicle production and sales rebound after the introduction of the new subsidy policy. Profit forecast Due to lower sales of charging piles than expected, photovoltaic power generation revenue growth, and the company obtained significant investment returns through share transfers in 2016, we raised our 2016 earnings forecast per share by 8% from RMB 0.66 to RMB 0.71, and the 2017 earnings forecast per share was reduced by 2% from RMB 0.91 to RMB 0.89. Valuation and recommendations Currently, the company's stock price corresponds to 37x/30x P/E in 16/17. We maintain the recommended rating and target price of RMB 35.53, with 33.27% upside compared to the current stock price. Compatible with 16/17 50x/40x P/E. Electricity restrictions and electricity price subsidies have been lowered in the risky photovoltaic industry; the introduction of the NEV policy has been postponed.