Key investment points Safety view: Leading explosion-proof electrical appliance enterprise: The company's predecessor was the Yueqing Electric and Optical Explosion-Proof Plant, a collective owned enterprise founded in June 1993. After more than 20 years of development, the company has grown into a leading domestic enterprise in the field of explosion-proof safety. The company is mainly engaged in R&D, design, production and sales of explosion-proof electrical products. It has a complete product line of mine explosion-proof electrical appliances, and occupies a dominant position in the field of explosion-proof electrical appliances for mining. The company's downstream customers are mainly coal producers, including large coal companies such as Shenhua Group and Longmei Group. In recent years, the boom in the coal industry has declined, the company's downstream demand has slowed down, and the explosion-proof electrical appliance business has been dragged down to a certain extent. The explosion-proof electrical appliance business is expected to hover at a low level in the next few years. Strategic transformation of the education industry, focusing on study abroad services: As the boom in the coal industry declined, the company's explosion-proof electrical appliance business was significantly affected, and the company actively planned a strategic transformation to create the company's second main business. After in-depth research, the company will transform into an education industry, focusing on study abroad services and online education. The company later acquired educational targets such as Zhongling Network, Yali Technology, Ledi Technology, Youlan Network, and Newban Culture, and successfully entered segments such as international curriculum training, overseas services, and online education. The company's secondary sector is being formed. According to the performance promises of Yali Technology and Ledi Technology, it was 16 million yuan and 10 million yuan respectively in 2016. If the promised performance can be achieved, the company's education asset contribution is expected to account for nearly 30% of the performance in 2016. The popularity of studying abroad has not abated, and the 100 billion market is waiting to be tapped: since the reform and opening up, the number of people studying abroad in China has continued to increase. In 2014, the number of people studying abroad in China reached 459,800, and since 1978, the total number of people studying abroad in China has reached 3,518,400. The scale of the study abroad industry in China has reached 250 billion yuan, mainly comprised of several components such as study abroad agencies, language training, study abroad tuition fees, and study abroad living expenses. Among them, international students account for 85% of overseas expenses, and the total tuition and living expenses of Chinese students can reach about 150-200 billion yuan; language training expenses account for about 13%, such as pre-exam training such as IELTS, TOEFL, and SAT. According to the survey, the market size for study abroad examinations and training has reached about 30 billion yuan. Furthermore, most international students will also choose study abroad agencies to complete the study abroad procedures. Study abroad agency services account for about 2% of the cost, and the market size is expected to reach 5 billion yuan. Transformational education is powerful, and high-quality projects have been launched one after another: After the company determined the direction of transformation in the education industry, the company quickly searched for high-quality projects and successfully implemented educational projects such as Zhongling Network, Yali Technology, Ledi Technology, and Youlan Network, and Transformational Education was powerful. At the same time, in order to search for quality education targets in a better and more professional manner, the company also used the power of professional ingenuity to actively initiate the establishment of an education industry fund with a total scale of 500 million yuan, Fengyu Fund with a total scale of 500 million yuan through majors such as Shanghai Qianhuang Investment Management Co., Ltd., and invested in Newban culture in a relatively short period of time to enter special fields such as music training. Investment suggestions: The company's revenue in 2016-2017 is expected to be 770 million yuan and 848 million yuan, respectively, up 45.82% and 10.13% year on year; net profit is 94 million yuan and 120 million yuan, respectively, up 75.2% and 28.0% year on year; EPS is 0.64 yuan and 0.82 yuan, respectively, corresponding to the closing price of PE on March 1, 2016, which is 52.01 times and 40.62 times, respectively. The company's main business has the ability to grow steadily, and epitaxial expansion has led to a significant increase in the company's performance, and strategic transformation education enhances the company's valuation space. We are optimistic about the layout in the field of study abroad services and online education. For the first time, we have covered and given a “Highly Recommended” rating. Comparing Sino-Thai Bridge and Yinrun Investment, we believe that the reasonable valuation range for the company in 2016 was 80-100 times PE, with a corresponding market value of 75-9.4 billion yuan, giving the company a target price of 48 yuan, corresponding to a market value of about 7.5 billion yuan after issuance. Risk warning: Competition in traditional main business intensifies, epitaxial expansion falls short of expectations, risk of merger and acquisition asset consolidation, risk of performance falling short of expectations, etc.