Event: The company achieved operating income of 387 million yuan in 2015, a year-on-year decrease of 15.42%, net profit attributable to the parent company of 67 million yuan, a year-on-year decrease of 25.32%, and EPS of 0.35 yuan. At the same time, the company used the capital reserve fund to transfer 10 shares to all shareholders for every 10 shares, and distributed a cash dividend of 1 yuan. Comment: The company's main revenue comes from the sales and application of molding machine control systems, servo systems, and the molding machine network management system iNet. The value added of the machinery industry increased 5.5% year on year in 2015, lower than the growth rate of GDP. Due to weak downstream demand and lower product prices, the company's operating income declined to a certain extent. The company's overall gross margin remained stable, above 41%, but due to the increase in the three major expense ratios, the decline in net profit exceeded the decline in revenue. However, the company is still a leading enterprise in the field of injection molding machine control. Its products account for about 45% of the market share. At the same time, the company is also actively expanding other downstream industries, carrying out structural upgrades, and vigorously developing oil-electric hybrid and all-electric high-end servo systems. Taiwan Hongxun, a subsidiary company, is actively developing business in Europe by setting up an overseas investment platform to help the company open up overseas markets. Actively deploying along the Industry 4.0 route: The company invested 80 million yuan to increase the capital of its subsidiary, Yixuesong Robotics Equipment Co., Ltd., and built a new robot R&D and production base. The project is expected to be fully produced by 2019. After delivery, 2,300 sets of robot bodies will be added every year, contributing 350 million yuan in revenue and 55 million yuan in net profit. On the other hand, the company focuses on developing the molding machine network management system iNet, which deeply integrates management of various major equipment and auxiliary equipment, integrates MES and ERP from the bottom up, and provides overall solutions for intelligent factories. The company's iNet project team successfully developed a number of general upstream plastic products suppliers in Shenyang, Zhejiang and other places in 2015. In addition to the automotive industry, where demand is most concentrated, iNet products have also entered a factory owned by Gree Group, a leading home appliance company, and completed the project construction of one of these plants. The two-way layout of the company's “robots+system platform” is in line with the development pattern of Industry 4.0 and will enjoy new opportunities for industrial upgrading. The target price is 30 yuan, maintaining the “increase in holdings” rating: We expect the company's EPS from 2016 to 2018 to be 0.43 yuan, 0.56 yuan, and 0.66 yuan respectively, giving a target price of 30 yuan to maintain the “increase in holdings” rating. Risk warning: the risk that downstream demand will continue to decline, and the risk of gross margin falling.