The company recently released its three-quarter report, and the performance growth rate is in line with expectations. During the period, it achieved cumulative operating income of 290 million yuan, a year-on-year growth rate of +7.24%; net profit attributable to shareholders of listed companies was 20.71 million yuan, a year-on-year decrease of 7.63%. The third quarter achieved quarterly operating income of 108 million yuan, a year-on-year growth rate of +3.30%, and net profit attributable to shareholders of listed companies of 8.91 million yuan, a year-on-year decrease of 5.17%. The slight increase in revenue in the current period was mainly due to the upgrading of downstream product functions and the expansion of product application areas. The year-on-year decline in net profit growth was due to the increase in depreciation of the unit plant after the Qingyuan base was put into operation and before production capacity was fully utilized. A leader in the domestic metal connectors industry, with broad room for future growth. The company is the only listed company in China that focuses on the production of slides and hinges, and its main business has stable gross margin and operating cash flow. Leading international companies in the industry mainly include European Hettich, Blum, and North American Agura, with a gross margin of about 60%. Among them, Agura (which produces ball bearing slides) has global sales revenue of more than 10 billion yuan. There are only 2-3 domestic brand manufacturers, and the market capacity is about 20 to 30 billion yuan. The company has huge room for future growth. Equity incentives stimulate employee motivation and lay the foundation for future performance growth. The company announced a restricted stock incentive plan in August, and plans to grant 1,545 million restricted shares to core cadres at a price of 16.75 yuan/share. The unlocking conditions are based on 2014 financial data. In 2015-17, the operating income growth rate was not less than 15%/50%/100%, and the net profit growth rate was not less than 10%/30%/75%, respectively. In a context where systemic risks still exist, the future of the company is tied to the interests of employees through equity incentive plans, demonstrating management's confidence in future performance. Fund-raising projects improve production capacity bottlenecks and provide guarantees for high long-term performance growth. By the end of 2014, the production capacity of the company's slides and hinges was 53.6 million inches and 65.55 million sets respectively. The capacity utilization rates were 97.17% and 95.37% respectively, and the main products were operating at full capacity. The company's performance and valuation are expected to improve dramatically as the fund-raising projects reach delivery. It is expected to increase operating income by 392 million yuan per year, increase annual profit by an average of 41.05 million yuan, and a payback period of 4.98 years. Profit forecasts and investment ratings. The company is a leader in the domestic metal connectors industry, with stable gross margin and operating cash flow from its main business. The recent equity incentive plan shows management's confidence in the company's future high growth. In the long run, raising projects to achieve production will resolve current production capacity bottlenecks and trigger performance elasticity. We forecast that the company's 2015-17 EPS was 0.71/1.12/1.46 yuan/share, respectively, and the corresponding PE was 58.54/36.95/28.31 times, giving it an “increase in holdings” rating. Risk factors: Industry demand did not meet expectations, and production capacity was expanding more slowly than expected.