Investment points 1. The company's motorcycle engine business bucked the trend. The general engine business was under pressure. The national motorcycle production and sales volume fell 14.44% and 15.01% respectively from the same period last year during the reporting period. However, the company's motorcycle engine production and sales volume bucked the trend and increased by 5.24% and 7.96%, consolidating the competitive advantage of motorcycle engine products. Among them, the sales scale and market share of high-displacement electric power products continued to increase rapidly. Affected by downward macroeconomic pressure during the reporting period, the company's general machinery business revenue declined significantly. As the company's large-scale agricultural machinery manufacturing business gets on the right track, the performance of the general machinery business is expected to improve. 2. The company's external development has progressed steadily. The integrated layout of the “Industrial Finance Network” has continuously improved the company's industrial chain finance layout, and established small loan companies and factoring companies. It achieved sales revenue of 52.95 million yuan and net profit of 34.68 million yuan during the reporting period, which has become a new source of profit growth for the company. Furthermore, the company also established a connected car company through Master Zuo to target the “Internet+” automotive aftermarket and enter the field of general aviation airport construction and seaplane production and operation, continuously increasing aviation resources, and continuously improving the integrated layout of the “industrial and financial network.” 3. Invest in Shenzhou Aircraft to build China's “Predator” drone. In November 2015, the company used its own capital to increase Shenzhou Aircraft by 140 million yuan, accounting for 16.67% of Shenzhou Aircraft Company's shares after the capital increase. Shenfei's core product, the “Rainbow” drone, is known as China's “Predator” drone. It is the first batch of aggressive drones exported in China in batches and the largest number of exports. The company and the Tianjin Internal Combustion Engine Research Institute jointly developed the TD0 aero engine, which has successfully tested the Rainbow 3 drone, breaking the monopoly of foreign engines. TD0 has outstanding performance, low Chen, and is expected to become the heart of domestic military drones. 4. Military drones have superior performance, and the market continues to grow. Compared with manned aircraft, military drones have the advantages of no casualties, good concealment, and high cost performance. They can adapt to various battlefield environments. They are widely used in military applications, and have received widespread attention from more and more countries. The global drone market reached 6.4 billion US dollars in 2014. According to forecasts, the size of the drone market will double to 11.5 billion US dollars in 2023, of which military drones will reach 9.9 billion US dollars, and the total military drone market will reach 81 billion US dollars in ten years. 5. Profit forecast expects the company to achieve net profit of 435 million, 488 million, and 521 million yuan attributable to the parent company in 16-18, corresponding to EPS of 0.38, 0.43, and 0.45 yuan, and corresponding PE of 26X, 23X, and 22X, maintaining recommended ratings. 6. Risks suggest that the expansion of military drone business is lower than expected.