Leading domestic board woodworking machinery, leading cutting board saws and processing centers, with innovative revenue and profit, the company's core products, such as edge banding machines, board saws, multi-row drills, processing centers, etc., are mainly used for the production and processing of customized furniture, integrated cabinets, wooden doors, etc. Among them, board saws and processing centers have a leading edge in China. The company's 2016 revenue exceeded 500 million yuan, net profit of 66.4 million yuan, 2017 Q1 revenue of 139 million yuan, and net profit of 17.33 million yuan, all of which reached record highs in the same period. In particular, there has been a marked recovery since the second half of 2016, mainly benefiting from extensive numerical control upgrades by downstream furniture manufacturers. The number of employees is expected to exceed 1,000 in 2017, a record high, and product supply is in short supply. Industrial upgrading: quality, efficiency, and labor saving are all industry development requirements. Tens of thousands of furniture factories across the country are facing problems such as recruitment difficulties and product quality improvement. Process improvements must be achieved through equipment upgrades to improve labor efficiency and product quality. At the same time, the board utilization rate can be increased from 85% to 95%, which is of great significance in cost savings, and also helps to alleviate recruitment difficulties. Consumption upgrade: The penetration rate of customized furniture continues to rise, driving the upgrading of downstream equipment. In 2015, the disposable household income and consumer expenses of urban residents in China increased 4.36 times and 3.83 times, respectively. Driven by nationwide consumption upgrades, customized furniture with remarkable advantages in personalization and diversity began to be increasingly favored by consumers. According to the forecast of Zhiyan Consulting, the growth rate of custom furniture is expected to reach 18% in the next 3 years. Customized furniture has become the fastest growing sub-industry in the furniture industry. The market size reached 158 billion dollars in 2015 and continues to grow, continuously invading the market share of traditional complete furniture and solid wood furniture. Regardless of the size of the enterprise, it hopes to share the cake through equipment upgrades or production expansion. As a leading equipment supplier, the company will benefit greatly. 2016 post-real estate cycle+2017 third- and fourth-tier relay: Future furniture growth is guaranteed. The sales area of commercial housing in China began to pick up in June 2015 and maintained a high growth rate in 2016. The cumulative sales area for the whole year of 2016 exceeded 1,573 billion square meters, an increase of 22.50% over the previous year. According to industry experience, the transmission cycle from the completion of sales in the real estate industry to the generation of revenue by equipment manufacturers is close to 12 months. Therefore, since the second half of '16, orders for the company's products began to rise sharply. In 2016, revenue growth recovered, and net profit increased by 32.39%. Benefiting from the fact that real estate in Q1 third- and fourth-tier cities exceeded expectations in 2017 and the continuous rise in second-hand housing renovation demand in first-tier cities, the sustainability of future demand in the furniture industry has been fully guaranteed, and it is expected that it will continue to support the recovery of the panel furniture machinery industry. Profit forecast: The company is the leader in the industry, with leading product technology and good customer reputation. Benefiting from the upgrading of downstream industries and the increase in the penetration rate of custom furniture, industry demand is expected to continue to pick up in 2017. The company's total number of employees at the beginning of the year has increased markedly, and has exceeded the peak of previous years. The supply of products is in short supply. It is expected that the revenue of the four core products, such as edge banding machines, board saws, multi-row drilling, and processing centers, will likely continue to increase in Q1 in 2017, and gross margin is also expected to benefit from an increase in scale. The company's net profit for 2017-2019 is estimated to be 99 million yuan, 137 million yuan and 182 million yuan respectively, corresponding to EPS of 0.90 yuan, 1.26 yuan and 1.66 yuan, covering the “buy” rating for the first time, with a target price of 48 yuan. Risk warning: The economic downturn has led to weak demand for furniture and a decline in fixed asset investment.