Peace view: build a power system leader, lay out new industries and strategic transformation and upgrading. The company is a leading enterprise in the domestic motorcycle and general power sector. In the first quarter of 2016, revenue was 1.12 billion yuan, up 8.0% year on year; net profit was 0.9 billion yuan, down 2.2% year on year; as new businesses such as drone power are still in the development period, short-term performance is still under pressure. The company will adhere to an extended development strategy, actively transform and develop into general aviation, financial services and other industries, and build a strategic development layout integrating the “industrial and financial network”. The two traditional main industries of motorcycles and general power have developed steadily. In recent years, the domestic motorcycle industry's annual production and sales volume have declined to a high level. The company's motorcycle engine sales are better than the industry's growth rate; GM's downstream market demand is relatively stable. Furthermore, the company plans to enter emerging market fields such as electric power and garden robots. New industries such as general aviation and large-scale agricultural machinery equipment have a lot of room for development: (1) The company successfully tested its drone engine and entered the general aviation industry chain. The company's TD0 aero engine was successfully tested on the entire Rainbow drone last year. It is expected that sales will be achieved this year, starting the process of industrialization of unmanned engines. (2) Entrusted to operate Chongqing Zongshengomeli to cultivate large-scale agricultural machinery and equipment business. Zongshengomeli mainly produces high-end agricultural machinery such as large-scale high-end corn harvesters. It is expected that the first batch of products will be put on the market and sold in the second half of this year. Establish an industrial and financial network operation platform to transform and upgrade to a comprehensive service-oriented enterprise. The company will build an “industry+finance+network” integrated operation model and diversified financial platform for industrial and financial networks, and enter the automotive after-sales service market to cultivate new profit growth points. Profit forecast and investment recommendations: The estimated operating income for 2016-2018 is 4.54 billion yuan, 4.82 billion yuan, and 5.29 billion yuan respectively, and the EPS is 0.31 yuan, 0.36 yuan, and 0.45 yuan respectively, and the corresponding price-earnings ratios are 34.7, 29.9, and 24.4 times. The company's traditional power systems business has maintained its leading position and steady development in the industry. New businesses such as general aviation have a lot of room for development, and for the first time, coverage was given a “recommended” rating. Risk warning: Market demand for traditional businesses such as motorcycles and general power has declined, new businesses such as general aviation have progressed less than expected, industry competition has intensified, etc.