This report is read as follows:

We believe that the company's major shareholders have high-quality assets such as jacks and elevator-driven motors, and there is a lot of room for asset securitization and extension expansion in the future. this increase means that the company has started the first step in the operation of the capital market.

Main points of investment:

Cover for the first time, give "increase" rating, target price 21.08 yuan. We believe that the company's main business volume is small and very robust, profitable, is a very good capital operation platform. At the same time, major shareholders have a high proportion of holding in listed companies (59.87%) and have high-quality asset resources, so there is a lot of room for asset securitization and extension expansion in the future. We estimate that the EPS from 2016 to 2018 will be 0.30, 0.32 and 0.34 yuan respectively. In view of the possibility of asset securitization and extension expansion of the company's major shareholders, we will be given the "overweight" rating for the first time, with a target price of 21.08 yuan, corresponding to a 70-fold PE in 2016.

Large groups, small companies, large shareholders account for a high proportion of high-quality assets in vitro. The major shareholder of the company is Changshu Jack Factory (Jiangsu Tongrun Mechanical and Electrical Group), which holds 59.87% of the company directly and indirectly. In addition, the major shareholder also owns high-quality assets such as Tongrun Drive equipment, the leading elevator traction machine company that has failed twice in IPO (with rare earth permanent magnet motor drive technology) and Tongrun Auto parts Co., Ltd., the world's largest Jack manufacturer. The company is expected to achieve great-leap-forward development with the help of the high-quality assets of major shareholders.

The main business is stable and profitable, and the increase will start the first step in capital operation. The company's main business tool cabinet is already a leader in the industry, the growth is weak, but the company's main business is small and profitable, and the proportion of major shareholders is high, so it is a very good capital operation platform. The company has not taken any action in the capital market since it was listed in 2007. it began its first acquisition in 15 years but ended due to the problem of land warrants of the underlying enterprise, and immediately launched the main business of non-public offering at the beginning of 16. This shows that the company has begun to attach importance to listed companies as the operating platform of the capital market, increasing the proportion of high equity of shareholders + high-quality assets in vitro, and there is a lot of room for asset securitization and extension expansion in the future.

Catalyst: approval of non-public offering; expected promotion of asset securitization or extension.

Core risk: asset securitization or extension expansion is blocked; fixed increase promotes low expectations.