Unique opinion: The company is a leading manufacturer of specialized thermal power machinery in China. In recent years, due to pressure from its main business, it has actively carried out epitaxial development to transform emerging business fields such as drones, general aviation, automobile and motorcycle core components, industrial chain finance, and automobile after-sales service networks. We are optimistic that the company will increase its capital and invest in Shenfei and enter the military drone engine manufacturing field. The company is expected to provide the power heart for China's Predator drones in the future. Investment points 1. The company takes its traditional main business as the core, actively carries out epitaxial development, and constructs an integrated “industrial and financial network” strategic layout. Although the company's motorcycle engine manufacturing business revenue is declining year by year, through product structure adjustments, gross margin has increased, and the impact on the company's profit level is limited. Affected by the increase in domestic and foreign demand, General Dynamics machinery manufacturing business grew rapidly, and gross margin also rebounded, becoming a new profit growth point for the company. The company has built a strategic layout integrating the “industry and finance network” through extended expansion into industrial chain finance, the “Internet +” automotive aftermarket, and general aviation. 2. Increase capital and invest in Shenfei to focus on transforming the military drone engine manufacturing field and building China's Predator Drone Company terminated the cooperation agreement with Hongbaichuan, abandoned complete drone research and development, and focused existing R&D resources on the aero engine business. The company increased its capital and invested in the Shenzhou space vehicle. Shenfei's core product is the “Rainbow” series of drones. It is the first batch of attack drones in China to achieve batch exports and the largest number of attack drones. The Rainbow 4 is superior to that of predator drones in all aspects, and is known as China's predator. The TD0 aero engine carried by the company and the Tianjin Internal Combustion Engine Research Institute successfully tested and flew successfully. It is hoped that the Rainbow series of drones will be officially installed in the future and become the heart of domestic military drones. 3. China is installing a large number of military drones. In 2024, the market size can reach 10 billion. China's military aircraft are completely lagging behind the US in terms of quantity and performance. By installing a large number of military drones, the gap with the US can be quickly narrowed. Currently, the number of military drones in China has ranked first in the world. In 2014, China's military drone market space reached 2.7 billion, and relevant agencies expect it to reach 10 billion by 2024. 4. The profit forecast predicts that the company will achieve net profit of 435 million, 488 million, and 521 million yuan in 16-18, corresponding to EPS of 0.38 yuan, 0.43 yuan, and 0.45 yuan, and corresponding PE of 29X, 26X, and 25X, giving recommended ratings. 5. Risk suggests that military drone engine business expansion falls short of expectations.