Investment points 1. Annual report The revenue of the traditional keyboard and mouse business remains stable, and the drone and robot business brings growth points. The company's traditional keyboard and mouse business achieved revenue of 389 million yuan in 2015, an increase of 0.95% over the previous year, which remained stable; the newly established holding subsidiary in 2015, the Shenzhen Zero Consumer Drone went on sale in June, with annual sales of nearly 30,000 units, achieving revenue of 59.84 million units, accounting for 12% of sales; the company's robot integration business has also made gains. Last year, it achieved revenue of 11.83 million, accounting for only 2.37% of sales, but compared with the same period last year. The growth rate reached 439%; the first quarter report that the e-sports peripherals and drone business continued to gain strength, and the company launched e-sports game peripherals for the Internet cafe market in 2015, and began large-scale promotion this year. The drone business also brought in additional volume. According to the first quarter report, sales revenue was 140 million yuan, a year-on-year increase of 43% over the previous year, and net profit of 10.71 million yuan was deducted, making it a strong proof that the company has officially relaunched its business, which will bring about an inflection point in the company's performance. Meanwhile, the company completed the disposal of shares in Lehui World in the first quarter and achieved non-operating income of 223 million yuan, resulting in a sharp increase in overall net profit to 194 million. The divestment of the game business will avoid becoming a burden in the later stages, and at the same time help the company concentrate on expanding various new businesses. 3. The company's fee rate was higher in 2015, mainly due to the initial market cultivation of new business, and the company's overall expense rate during the reporting period was 41.59%, an increase of 10.52 percentage points. Among them, the management expense ratio was 20.96%, an increase of 6.12 percentage points; the sales expense ratio was 25.54%, an increase of 6.52 percentage points. The sharp increase in the sales expense ratio was mainly due to an increase in market development costs such as advertising and publicity, and the impact of Shenzhen's zero degree of inclusion in the scope of the merger; the large increase in the management expense ratio was mainly due to an increase in share payment costs, an increase in the cost of Shenzhen Zero being included in the scope of the merger, and an increase in R&D expenses for new drone product types. 4. The company launched lightly this year. The company is most optimistic that consumer drone development companies will join forces with Zero Intelligent Control and Tencent. This year, a number of new drone products will be officially launched one after another. After a new generation of product iterations, it will be easier to explore the market. Among them, the small consumer-grade drone Kongying, which was jointly developed, is expected to go public in the middle of the year and is expected to drive a wave of drone consumption through Tencent's strong marketing channels. Last year, the company announced a non-public stock offering plan to raise no more than 1,195 million dollars, of which 705 million will be used for drone industrialization projects and 150 million for drone technology center projects. As fixed increases are put in place, the company's drone business will become a new engine for development. 5. Profit forecast: The company's goodwill impairment treatment for Lehui World last year caused an annual loss of 448 million dollars. The company threw the burden on 2015. This year, with the continuous advancement of various new businesses, the company is expected to achieve net profit attributable to the parent company of 346 million and 201 million yuan in 16-17, corresponding EPS of 1.22 and 0.71 yuan, and corresponding PE of 31X and 54X, maintaining a highly recommended rating. 6. Risk warning: E-sports peripherals, drones, and robotics business development falls short of expectations.