Incident: The company's operating income during the reporting period was 174 million yuan, net profit attributable to shareholders of listed companies was 25.239 million yuan, and net profit attributable to the listed company after deduction was 22.4437 million yuan, up 0.80%, 1.86%, and -5.69% year-on-year. Opinion: The company's development strategy is clear, and the main business is growing steadily. During the reporting period, the company formulated a clear “two-wheel drive” long-term development strategy, with intelligent equipment as the core, focusing on building smart factories, and establishing an intelligent ecosystem with the goal of achieving “Jinming Industry 4.0” and deploying rehabilitation robots to enter the health field. The development of the company's business and subsidiaries closely revolved around and carried through strategic planning. Under the circumstances of the slowdown in domestic macroeconomic growth, the transformation of the industrial manufacturing industry, and the general decline in the performance of the same industry, it achieved steady development of operating income of 171 million yuan, up 0.8% year on year, and net profit increased 1.86% year on year. Among them, the subsidiary Yuandong Light Equipment, as the company's manufacturer of plastic machinery and complete packaging equipment, achieved operating income of 41.1332 million yuan, an increase of 559.65% year on year. Looking at the business module, the revenue of film blow molding machines fell 4.28% year on year, and gross margin increased 1.19% to 42.32%. It is still the main contributor module to profit. The operating income of complete film/paper processing equipment increased 7.30%, gross margin decreased slightly, other equipment and plastic products business revenue grew rapidly by 52.26%, and gross margin increased 3.13% year on year. Focusing on equipment research and development in high-growth application fields, the prospects for smart factory construction are bright. The company is the leading film production equipment in the entire domestic market chain, and has advanced core equipment production technology. Currently, the sales revenue structure is 40% for food packaging, 30% for agriculture and 30% for other fields, with a domestic market share of 75%. During the reporting period, in response to the hierarchical demand for membrane production equipment in different industries, the company is preparing to raise 670 million yuan in capital through a private stock offering to focus on product research and development in the fields of agriculture, medical care, and high-performance special membranes. In the agricultural sector, the company has launched a high-quality agricultural eco-film intelligent equipment project, which is committed to improving the current unreasonable structure of domestic agricultural film products. According to the survey, the current domestic agricultural film accounts for only 22% of the total agricultural film production, which is far different from 70% of developed countries' share, and the market prospects and profit margins are broad. In the medical care field, the company's breathable film blow molding equipment has completed the line design and entered the component manufacturing stage. Breathable film is a key raw material for medical protective equipment and personal care products. Along with changes in China's population structure and consumption upgrades, the demand for highly comfortable and functional nursing products has increased, and the demand for breathable film demand has reached 10% per year, and the market potential for breathable film blow molding equipment is prominent. The company focuses on the high-performance special film industry, such as photovoltaic films, lithium battery films, and military films. Currently, it has obtained Level 3 military secrecy qualifications, and future market expansion will also be skewed towards the military along with the stimulus of the “People's Participation in the Army” policy. The technical level of this type of membrane product is high. Currently, the level of automation, intelligence, refinement and digital informatization of most domestic equipment cannot meet production requirements. The company integrates strong technology research and development capabilities, automated intelligent equipment and cloud data platforms to build smart factories to form highly functional special membrane equipment to provide integrated services to production solutions. According to Smither Pira's research data, the global specialty film market will reach US$29.1 billion by 2018. Currently, the regions with the highest consumption growth rate are Asia and Latin America. China's demand for specialty films has been strong in recent years, and it is expected to surpass the US to become the world's largest specialty film consumer market in 2018. During the reporting period, the project progress of the special high-efficiency and energy-saving multifunctional membrane equipment technology transformation project reached 59.61%. The company's long-term partners in high-function special membrane equipment technology research and development, intelligent software control and cloud data technology, control systems and basic theory are all top domestic and foreign manufacturers and scientific research institutions. The prospects for achieving smart factory projects are bright and are expected to become a powerful driver for rapid growth in performance. Laying out in the “big health” field, rehabilitation robots will help increase performance. The company's epitaxial development strategy lays out the health industry. Jinming Intelligent Equipment Research Institute, a subsidiary established with its own capital, integrates and leverages the brand, technology and resource advantages of listed companies, collaborates with the Department of Mechanical Engineering of Tsinghua University to develop rehabilitation robot technology, and is committed to filling the gaps in rehabilitation robots in the domestic market. People are paying more and more attention to health, and there is a consensus on the aging trend of the domestic population. The medical rehabilitation industry started relatively late compared to developed countries, and there is huge potential for independent research and import of related equipment. At the beginning of 2016, the three national ministries and commissions jointly issued the “Robotics Industry Development Plan (2016-2020)” to encourage the development and production of robots in the field of medical rehabilitation and the elderly and disability assistance. Grandview Research (Grandview Research) predicts that the global general rehabilitation robot market will grow at a compound annual rate of 37% in the next five years. Currently, domestic intelligent technological innovation, cloud data computing platforms, and the rapid development of the robotics industry have injected momentum and opportunities into the medical rehabilitation industry, and rehabilitation robots are already on the cusp of the industry. The company aims to become a benchmark in the rehabilitation robot industry. With years of high-end manufacturing technology and the advantages of intelligent data platforms, the company starts with rehabilitation robots to create future integrated rehabilitation treatment services. The development path is clear, which will have a positive impact on performance development. Conclusion: Jinming Precision Machinery is a leading domestic plastic film blow molding equipment manufacturer. It has obvious competitive advantages such as technological innovation and brand, and has strong strength to provide a full range of film equipment and solution services. During the reporting period, the company's “two-wheel drive” medium- to long-term development strategy was clear, with the strategic goal of becoming an industry benchmark and leading industry trends, focusing on equipment R&D and innovation in high-growth downstream applications. The smart factory project progressed smoothly; epitaxial entered the rehabilitation robot industry, clinical trials are in the process of improving, mature products will be launched at the right time, and market potential can be expected. In addition, the company's domestic market share has reached 75%. After obtaining military qualifications, product application fields have been further expanded, and overseas markets are also being promoted at an accelerated pace. We are optimistic about the company's medium- to long-term business layout and performance trends. We expect the company's revenue from 2016 to 2018 to be 409 million yuan, 496 million yuan and 574 million yuan respectively, with net profit attributable to shareholders of listed companies of 54 million yuan, 64 million yuan and 95 million yuan respectively. Earnings per share are 0.22 yuan, 0.26 yuan and 0.39 yuan respectively, and corresponding PE is 68.06X, 57.06X and 38.14X respectively. The first coverage gave a “recommended” rating, and a 6-month target price of 16.5 yuan was given. Risk warning: Downstream demand is sluggish, “Jinming Industry 4.0” strategy development falls short of expectations, rehabilitation robot research progress falls short of expectations