Summary of the report: The joint venture established Anhui University of Science and Technology Logistics Systems Co., Ltd. to extend the intelligent manufacturing industry chain: Shanghai Science and Technology Intelligent Electric Co., Ltd., a wholly-owned subsidiary of HKUST Intelligence, plans to jointly fund the establishment of Anhui Science and Technology Intelligent Logistics Co., Ltd. with natural person Zhong Zhimin, with a registered capital of 10 million yuan, of which Shanghai Electric Company invested 7 million yuan with its own capital, and Zhong Zhimin invested 3 million yuan with its own capital. The joint venture is mainly engaged in the development and production of automated equipment and systems for warehousing and logistics, commercial distribution and e-commerce logistics. The joint venture can give full play to the advantages of technology and industry experience accumulated by both parties in the field of intelligent manufacturing and logistics transportation systems, helping to expand and optimize the company's industrial layout in the field of intelligent logistics systems for industrial production. With the acquisition of Guanzhi Automation and Huaxiao Precision, leading companies in intelligent manufacturing in the automotive industry revealed: the company is based in Yongqian Electromechanical, and has further penetrated into the automotive OEM supply chain system through the acquisition of Guanzhi Automation and Huaxiao Precision. Guanzhi Automation has long served German brands such as Volkswagen, and has rich experience in automotive side and bottom panel automation; Huaxiao Precision is Nissan's global strategic partner, and the AGVs produced are widely used in assembly workshops. In the future, Yongqian Electromechanical, Guanzhi Automation, and Huaxiao Precision are expected to form a joint effort with their respective technical and customer resource advantages in the automotive field, further enhancing their influence in OEMs. The main business is growing steadily and entering the new energy industry automation field: The company's main business is mainly affected by downstream customers' power system investments. Competition in the original power distribution automation industry has intensified since 2011, and the company's gross margin and profitability have declined markedly. Since 2013, the company's business has bottomed out and rebounded. Achievements in R&D and market development have gradually become apparent, sales of electrical distribution products have increased, and gross margin has gradually rebounded. The company has accelerated the pace of business development, built a leading smart new energy industrial base in China by signing a “Framework for Strategic Cooperation Agreement” with Guoxuan Hi-Tech, and is actively entering the field of automation for the new energy industry. Investment recommendations and ratings: The company's net profit for 2016-2018 is estimated to be 244 million yuan, 320 million yuan and 414 million yuan, EPS is 0.35 yuan, 0.45 yuan and 0.59 yuan, and PE is 75 times, 57 times and 44 times, giving it an “increase in holdings” rating. Risk warning: Business development falls short of expectations, and the risk of market competition is increasing.