Investment highlights: 1. Incident 1. The company plans to invest a total of 10 million US dollars in the US company Meta Company (“Meta”) with overfunded capital and own capital. After the capital increase was completed, GQY held 178,600 preferred shares of the target company, accounting for 3.617% of the target company's shares on a complete dilution basis. 2. The actual controller of the company promised that the company's net profit attributable to the shareholders of the parent company in 2016 was not less than 30 million yuan (the growth rate was not less than 53.34% based on 2014). 2. Our analysis and judgment (1) Invest in Meta in the US; Entering the 100 billion dollar AR market Meta is a high-tech company with R&D as the core, focusing on wearable augmented reality (AR) smart devices and ecosystems, providing support platforms for AR smart glasses, SDK development tools, and complete software and hardware support platforms for AR applications. According to the company announcement, Meta currently has the most advanced augmented reality technology and products in the world. Steve Mann, chief scientist of Meta's team, is known as the “father of wearable computing,” and his research results on wearable computing are 30 years ahead of Google; chief consultant Steve Feiner is known as the “father of augmented reality.” AR technology can integrate and display different data, and can be combined with e-commerce, product advertising, and O2O; AR hardware is instrumental, alternative to mobile phones, and has a wide range of application scenarios. According to estimates, the AR market revenue is expected to reach 120 billion US dollars in 2020, which will be higher than the revenue scale of the VR market of 30 billion US dollars. By investing in Meta to join the AR ecosystem, GQY Video integrates Meta's AR technology with GQY Video's large-screen integrated display technology to form unique display applications, expand the application market, upgrade traditional main businesses, and open up new growth points. (2) Investing in Jibo, the intelligent robot business has made significant progress. Jibo is the world's leading developer and manufacturer of smart home robots. The core team comes from the Massachusetts Institute of Technology Media Laboratory in the United States. CynthiaBreazeal, founder and chief scientist of J-ibo, is recognized as a pioneer of social robots, and his work is also regarded as a pioneering achievement in the field of social robotics. According to the company announcement, the Jibo robot is the world's first social robot with artificial intelligence, and has now entered the preparation stage for mass production; at the same time, the Jibo robot's SDK is an open software development platform that can be developed and used by robot enthusiasts around the world. According to the announcement, Jibo expects sales of its Jibo robots to reach 58,083 units in 2016, achieving revenue of 46 million US dollars and profit of 13.5 million US dollars. Sales volume in 2017 is expected to reach 249,771 units, achieve operating income of 216.31 million US dollars, and profit of 91.69 million US dollars. Jibo's growth and profitability have been outstanding. Through this investment, the company will participate in the development, production and manufacture of the world's leading intelligent social robot products, and will further consolidate the company's strategic deployment on intelligent service robots. The company has advantages in robot hardware and marketing planning for the Chinese market. Combining the advantages of Jibo's artificial intelligence and software platforms, the two sides will carry out rich forms of cooperation in the Chinese market. We judge that this investment is just the beginning; the company will have further cooperation with Jibo in the future. At the same time, the company currently has more than 600 million yuan in cash on its books. We believe the company will not rule out the possibility of continuing to increase its intelligent robot business through external mergers and acquisitions in the future. (3) The actual controller of the company promised that the performance in 2016 would increase by more than 53% over 2014. The board of directors of the company received a notice from Mr. Guo Qiyin, the actual controller, chairman and general manager of the company on January 6, 2016. Based on optimism about the company's development prospects and firm belief in the company's continuous improvement of industrial performance, and in order to convey to investors the confidence of actual controllers in the future development of the company and good expectations of the company's value, Mr. Guo Qiyin made the following promises to the company and investors: “As the actual controller, chairman and general manager of the company, I promise that the growth rate of net profit attributable to shareholders of the parent company in 2016 will not be less than 53.34%, that is, the company's net profit attributable to shareholders of listed companies in 2016 will not be less than 53.34%. 30 million yuan. If the company's net profit attributable to shareholders of the listed company in 2016 does not reach 30 million yuan, I will make up for the difference in performance of the listed company in cash.” We believe that the actual controllers of the company have full confidence in the future of the company, and we do not rule out the possibility that the performance will exceed expectations. (4) There are sufficient reserves of intelligent robot technology, and accelerated implementation of new products. Currently, the company has sufficient technical reserves. Through strong alliances with overseas teams, institutions of higher learning, and research institutes, it has robots in: ① intelligent robot driving mechanisms; ② low voltage servo drives; ③ inertial sensor technology; ④ motion planning and control of multi-axis robots; ⑤ robot navigation and positioning; ⑥ based on IoT cloud robot platforms and other core technologies in the robot industry. Product aspect: Medical robots - Special robot product prototypes, mainly on-board self-balancing rescue platforms, are expected to be launched in the second half of the year. On August 15, 2014, the company invested in the establishment of Shanghai New Era Robotics Co., Ltd., a wholly-owned subsidiary of special robots, focusing on R&D, production and sales of vehicle self-balancing rescue platforms. Its main robot project is “Development of the first prototype of a vehicle self-balancing rescue platform”. This product uses a new parallel robot technology platform, sensing technology, human-computer interaction technology, and other key technologies to serve robots. It can actively counteract the effects of inertial motion such as road bumps, vehicle body shaking, and vehicle acceleration and deceleration, and ensure that medical personnel can provide simple care for critically ill patients on ambulances and avoid secondary damage during transportation. A prototype of this product will be launched in the second half of 2015. Special robots - deep-water robots: GQY and Stanford University Robotics Laboratory have signed a memorandum of cooperation to develop deep-water robots. Next month, they will participate in deep-water experiments in France. This project has received support from the French government. The deep-sea robot will perform undersea exploration operations below 100 meters through image visualization. The robot's flexible fingers can complete sample collection operations and perform various physical measurements in multiple marine ecosystems. The deep-sea robot can perform autonomous attitude control and can also communicate through underwater wireless communication. The operator uses two robot arms with strong feedback and tactile perception to perform remote operation of the underwater robot. Below 100 meters is very complicated, and video transmission and operation on the seabed has not been achieved until now in the world. Special robots - mining and emergency rescue robots: Jointly developed with various laboratories of bionic robots at Stanford University, the world's top and cutting-edge technology, including research and development funding provided by Middle Eastern oil countries. Special robot - GQY mobile police platform: It is also used in **** Square. Some anti-terrorism equipment and police equipment have already begun to be sold. The service robot - iGO is about to be promoted: the civilian product iGO will be released at the end of October. The focus is on campuses. The price is very low, a few thousand yuan, so that college students can easily reach from dormitories to classrooms, from classrooms to restaurants, and replace bicycles. (5) China will become the largest market for robots, the prospects for the service robot market are promising, China will become the largest market for robots, and the prospects for the service robot market are promising. The total size of the global service robot market will reach 200 billion in 2014-2017, only 30 billion in 2013, and the compound growth rate in the next three years will reach 22%; the growth rate of the Chinese market is far higher than the global growth rate. We expect the global service robot market demand to exceed $1 trillion over the next ten years. The national “12th Five-Year Plan for the Development of Service Robotics Technology” states: Cultivate the service robot industry into a strategic emerging industry in China's future. The project will focus on deploying “one goal, three breakthroughs, and four major tasks.”The four major tasks refer to focusing on the development of public safety robots, medical rehabilitation robots, bionic robot platforms, and modular core components. The global service robot industry is divided into professional service robots (special robots) and personal and household service robots. Home service robots and site professional service robots are highly intelligent, and are expected to become smart terminal entrances and smart home platforms, and there is huge room for future development. The development of service robots will go from simple to complex, and from easy to difficult. The application scenarios of cleaning robots are simple, and it is optimistic that they will explode first; surgical robots and military robots have advantages and characteristics beyond manpower, and are expected to spread rapidly after costs are further reduced and functions continue to be enhanced. (6) Shareholders holding 5% or more of the shares: Promising that the stock price will not be reduced by less than 50 yuan within the next 6 months, the company received a “Letter on increasing holdings and promising not to reduce the company's stock holdings” from Mr. Yao International, a shareholder holding 5% or more of the company's shares on July 16, 2015. Based on full confidence in the development strategy of the company's transformation into an internationally leading intelligent robot company, Yao International continued to increase its holdings by 2.57 million shares from June 29, June 30, July 1, and July 15, 2015, and it is not ruled out that it will continue to increase its holdings in the future according to market conditions. Yao International promised that starting from July 16, 2015, it will not reduce its holdings of the company's shares for the next 6 months; in the next 6-12 months, if the company's stock price does not reach 50 yuan, it will not reduce its holdings in the company's shares; in the next 12-24 months, if the company's stock price does not reach 80 yuan, it will not reduce its holdings in the company's shares. As of September 30, 2015, Mr. Yao International held 2.57 million shares of the company through a general securities account, accounting for 1.21% of the company's total share capital; held 10618888 shares of the company through the China Galaxy Securities Co., Ltd. customer credit trading guarantee securities account, accounting for 5.01% of the company's total share capital; held a total of 131,888 shares of the company, accounting for 6.22% of the company's total share capital, and is a shareholder holding 5% or more of the company's shares. According to the company announcement, because Yao International is optimistic about the future development prospects of the company and the growth space of the intelligent robot industry, from April 7, 2015 to May 21, 2015, through the China Galaxy Securities Co., Ltd. customer credit trading guarantee securities account, increased its holdings by 106,18888 shares through centralized transactions, accounting for 5.01% of the total shares. The details are as follows: 748,8800 shares were purchased from April 7 to April 30, 2015. The price range for the increase was 17.99 yuan to 21.06 yuan. 3130088 shares were purchased from May 4 to May 21, 2015, and the price range for increased holdings was $18.01 to $26.16. We are concerned that Zhongyuan Xiehe Cell Genetic Engineering Co., Ltd. (600645) became GQY Video's fourth largest tradable shareholder in GQY Video's 2015 interim report, holding 2.08 million shares, accounting for 0.98% of the total share capital. At the same time, we are concerned that the listed company Zhongyuan Xiehe (600645) received a voluntary donation of RMB 1 million from Mr. Yao International to the company on May 5, 2015, specifically for the company's R&D expenses in the field of next-generation CAR-T immune cell therapy technology. According to the 2014 annual report of Zhongyuan Xiehe (600645), at the end of 2014, Yao International held 5.07 million shares of Zhongyuan Xiehe, accounting for 1.44% of the shares. It is the fourth largest tradable shareholder of Zhongyuan Xiehe, and the only individual investor among the top ten tradable shareholders, holding a market value of about 200 million yuan. 3. Investment advice The company strives to build a leading intelligent robot enterprise with an annual output of 10 billion dollars, focusing on special robots, service robots, and medical robots. The company has a market value of 5.6 billion yuan and cash of 600 million yuan. It is expected that in the future, the company will continue to increase the intelligent robot business through endogenous and epitaxial methods. We are optimistic about the development prospects of the intelligent robots+AR industry and maintain the company's “careful recommendation” rating.