Key investment points Traditional lighting and light application businesses are developing steadily, and entering new fields such as drones and new energy. (1) The company's traditional main business is lighting and light application products. Sales of fluorescent indoor lighting products have gradually declined, while sales of LED products have increased rapidly, and the traditional lighting and light application business has generally maintained steady development. (2) In March 2015, the company completed the acquisition of Fushun Optoelectronics. Fushun Optoelectronics's business was involved in LED outdoor lighting, new energy vehicle charging stations, and intelligent packaging equipment. In May 2015, the company increased capital and held Manta Intelligence to lay out the drone industry; the company deployed emerging industries such as drones and new energy through mergers and acquisitions. Fushun Optoelectronics's LED business has maintained rapid development and entered the charging pile market. Fushun Optoelectronics's main products include LED lighting products, LED display systems, and counter service products, mainly for users in municipal engineering, financial telecommunications, highway tunnels, advertising media, stadiums and other industries. (1) Fushun Optoelectronics achieved operating income of 390 million yuan and net profit of 63.66 million yuan in 2015; benefiting from factors such as the rapid development of the LED industry, the company's performance is expected to grow by more than 20% in 2016. (2) The company has successfully developed products such as charging stations and laid out the field of new energy vehicles. In August 2016, Fushun Optoelectronics and Nanjing Rongyue Electronic Technology Co., Ltd. signed a “Purchase and Sale Contract” for charging piles, with a contract amount of 105 million yuan. The Manta S6 was successfully released, and the prospects for the development of the drone business are worth looking forward to. (1) Manta Intelligence is positioned in the consumer drone market; the Manta S6 small drone was officially released in August 2016, and is expected to achieve mass sales in 2017. Small drones are easier to carry and travel, and will become an important development direction for the consumer drone market; the S6 is positioned in the small drone market and has a strong competitive advantage, and future development prospects are worth looking forward to. (2) According to market research firm IDC's forecast, global consumer drone shipments will increase from 390,000 units in 2016 to more than 3 million units in 2019, and consumer-grade drones are in a period of rapid development. Profit forecast and investment recommendations: The estimated operating income for 2016-2018 is 955 million yuan, 1,185 billion yuan, and 1,501 billion yuan; net profit is 84 million yuan, 121 million yuan, and 186 million yuan, corresponding growth rates are 47.9%, 44.1%, and 53.9%; EPS is 0.23 yuan, 0.33 yuan, and 0.51 yuan respectively, and corresponding price-earnings ratios are 68.7, 47.7, and 31.0 times. The company has transitioned from traditional lighting business to new fields such as drones and new energy, and the LED business has maintained rapid development. The development prospects of new products such as drones and charging stations are worth looking forward to. For the first time, coverage was given a “recommended” rating. Risk warning: The growth rate of traditional lighting and light application businesses has declined, and the development of new businesses such as drones has fallen short of expectations.