Core Opinions The company published its 2016/1 quarterly report on April 29. In the first 3 months of 2016, the company achieved revenue of 430 million yuan, an increase of 154% over the previous year. We expect a sharp increase in revenue mainly due to the contribution of Toyota's hybrid model parts supply business. At the same time, the company recorded a net loss of 35 million yuan, which is slightly lower than expected, mainly because Toyota's business has not reached a break-even point and has not received government subsidy support. According to the guidelines of a quarterly report, Coli can reverse losses in the first half of the year, which means that it can achieve a net profit of at least 35 million yuan or more in the second quarter, and there is an inflection point in operations. In 2016, we are optimistic about the hybrid technology route and are waiting for the results to be realized. Due to the pressure of fuel consumption regulations, we expect the passenger car hybrid market in China in 2020, including oil-electric hybrids and plug-in hybrids, with a production and sales scale of more than 2 million units, with a corresponding share of more than 8%. 2016 was an important business inflection point for the company. First, demand for Toyota's dual-engine models was strong, driving the extreme film sales to double and breaking through the break-even point. Second, the first model equipped with the CHS system will soon be launched in the second half of the year, which is expected to boost investor confidence and drive the company's valuation up. Reiterate the “buy” rating and target price of 26 yuan: we believe that hybrid power, like pure electric technology, is an important energy saving and emission reduction technology, and is more likely to be industrialized. Based on this, we expect Keliyuan to achieve leapfrog development in 2016-2020 with net profit of 100 million yuan, 200 million yuan, 400 million yuan, 600 million yuan, and 1.2 billion yuan respectively. Reiterate the “buy” rating and target price of 26 yuan, based on 20 times the expected price-earnings ratio in 2020.