Summary of the third quarterly report, the company achieved operating income of 198 million yuan in the third quarter of 2016, a year-on-year decrease of 43.02%, and net profit attributable to the parent company of 17.4067 million yuan, an increase of 66.85% over the previous year; from the beginning of the year to the reporting period, it achieved a total revenue of 1,043 million yuan, an increase of 29.47% over the previous year, and net profit attributable to the parent company of 119 million yuan, an increase of 281.71% year on year. Financial report review 1. The company's sharp decline in revenue in the third quarter was mainly due to poor performance in the traditional shipbuilding and offshore engineering business, but the overall growth rate in the first three quarters was impressive, mainly due to the increase in natural gas sales and the combination of acquisition funds for shipping. The company's three major businesses, namely defense equipment and related business, ship and offshore engineering business, and clean energy business, are operating in an orderly manner. The 2016 business plan has been successfully completed, and the performance can be expected throughout the year. 2. The company completed the acquisition and listing of Golden Shipping in the first half of the year. Gold Shipping is mainly engaged in R&D, production and sales of high-performance polymer products and marine and air equipment products. The products are widely used in marine life saving and military special purposes. The acquisition of Jinhaiyun not only boosted the company's performance, but also strongly promoted the transformation and upgrading of the company's traditional business. Relying on the company's existing ship design and general contracting capabilities, the company uses the manufacturing advantages and qualification advantages of Jinhaiyun's marine life saving and sea and air equipment, collaborates and complements each other in sales channels and industry chains, actively develops and reserves related technology, and explores and enters the field of military auxiliary ships in due course. It is expected to open up new development space. 3. Profit prediction and investment advice. Although the downturn in the shipping market and the slump in the marine engineering market have had an impact on the company's traditional business, the company has successively acquired Woking Natural Gas and Xeneng Transportation and Gold Shipping to intervene in the clean energy business and defense equipment business, taking the first step in civil-military integration transformation and upgrading. It has both a guarantee of current performance and considerable room for long-term growth. Considering the combined table, we predict that the company's EPS in 2016-2018 will be 0.35, 0.41, and 0.52 yuan/share, respectively, and the corresponding EPS will be 75/63/50 times, respectively. In view of the company's future development of new markets in the military sector, we give the company a recommended rating. Risk warning: traditional business declined; new market development fell short of expectations.