Incident: Recently, the company announced plans to buy 100% of Ganzhou Dongji's shares and Hengyi Investment to buy assets related to the NdFeB business held by Hengdian Import and Export; at the same time, it plans to raise supporting capital from Hengdian Holdings, Juzhou Assets, and Silicon Valley Huiyin Dingding to be used in fire robots and fire training simulation industrialization projects, NEV drive system R&D and industrialization projects, and high-performance magnets for NEV power motors. The company will resume trading on December 3. Key investment points: The plan is to acquire high-performance NdFeB assets such as Ganzhou Dongji for 613 million yuan, upgrade and improve the NdFeB industry chain+solve competition problems in the industry. The company purchased 2 major assets at a price of 613 million yuan (Ganzhou Dongji 100% equity of 550 million plus Hengdian related NdFeB assets of 66 million yuan). The total net profit of the underlying assets for 2016-18 is predicted to be 4675, 55.85 million, and 68.33 million yuan. Ganzhou Dongji products are widely used in wind power, new energy vehicles, motors, mobile communications, high-end audio, instruments, electronic components, etc., and occupy a certain market share in wind power generators, new energy vehicles, etc.; Hengdian's NdFeB assets are mainly engaged in the export business of NdFeB permanent magnet materials for permanent magnet motors, speakers, auto parts, etc. Through this acquisition, the company will further upgrade and improve the existing industrial chain, promote the development of high-performance NdFeB permanent magnet materials business and equipment manufacturing, exert large-scale synergy effects, and solve the problem of peer competition with the majority shareholder Hengdian Holdings. It is planned to invest 330 million dollars to vigorously develop high-performance magnets and drive systems for new energy vehicle motors. The company is actively expanding the downstream NdFeB industry chain. It plans to invest 130 million yuan to implement a high-performance magnet research and industrialization project for new energy vehicle power motors through Yingluohua Magnetic. The plan is to fully achieve an annual production capacity of 600 tons of high-performance magnets for new energy vehicle motors after delivery, with an estimated additional revenue of 220 million and a net profit of 30 million yuan after delivery; in addition, it plans to invest 200 million yuan to implement new energy vehicle drive system R&D and industrialization projects through Lianyi Electric. The plan is to increase the production capacity of 40,000 new energy vehicle driving systems after delivery. . Currently, in the early stages of development of the Xinneng Electric Railway Department, there is plenty of room for explosion and high industrial return. The project will effectively absorb upstream companies' NdFeB production capacity and accelerate the transformation and upgrading of the industrial chain. Together with the Robotics Research Institute of Harbin Institute of Technology, we invested 180 million yuan to enter the Chaoyang firefighting robot industry. The company plans to jointly build a research and development platform with the top robotics research institute of Harbin Institute of Technology in China to enter the fire robot and emergency service industry from a high starting point, such as purchasing the knowledge industry. The company combined its own experience in manufacturing micro motors and equipment to implement the fire robot project through Lianyi Electric. After completing the project, it is planned to increase the annual production capacity of 2,380 fire robot products and 5 sets of fire simulation training systems per year. The project was partially put into operation in the 3rd year, and full production began in the 5th year. The production is expected to increase revenue by 280 million yuan and net profit of 28.88 million. Fire robots are one of the special robots supported by the country. If the technology is mature, they are expected to become just what they need in the future, and the market space is large. Profit forecasting and investment advice The company actively upgraded and perfected the NdFeB industry chain and extended it to the downstream Chaoyang new energy vehicle industry. At the same time, it joined hands with the Robotics Research Institute of Harbin Institute of Technology to enter the fire robot industry from a high starting point. The transformation is very interesting and promising. It is recommended to focus on the progress of the transformation. Considering fixed increases and dilution, we expect the 2015-17 EPS exam preparation to be 0.08/0.18/0.27 yuan, and the corresponding PE is 158/66/45X, which is the first “gain” rating. Risk warning: The NdFeB industry is declining; new business expansion falls short of expectations