Incidents: Recently, the company released its three-quarter report. Revenue for the first three quarters was 290 million yuan, an increase of 7.2%, net profit of 20.71 million yuan, a decrease of 7.6%; of these, revenue for the third quarter was 108 million yuan, an increase of 3.3%, and net profit of 8.91 million yuan, a decrease of 5.2%. Investment logic: In a situation where the overall domestic economy is sluggish, the domestic manufacturing industry will enter an upgrade cycle and will move from the product export stage to the brand export stage. We are optimistic about hidden champion companies with large market space and excellent product quality. Xinghui Precision is one of the leaders in the domestic rail and hinge industry. The domestic market size is 20 to 30 billion yuan. Currently, the company's revenue is around 400 million yuan, so there is plenty of room for growth. Investment points: 1. The company's slides and hinges were initially rooted in the industrial sector, and later expanded to the civilian sector. Currently, industrial and civil revenue each account for half. They are direct or indirect suppliers to well-known domestic and foreign companies such as Toshiba Electric, Electrolux, Emerson Electric, Waterloo, Hisense Electric, Midea Electric, Vantage Gas, Wanhe Electric, Stanley, Jiangsu Tonrun, Quanyou Furniture, Meike Meijia, Country Garden Furniture, Sophia Cabinet, Shanghai Electric Bus New Energy, Lambe Information, and BYD。 We believe that the business characteristics of the company's downstream customers across the industrial and civil sectors can avoid the impact of the economic cycle on the company. 2. Xinghui Precision's target companies include Agula in the US, Blum in Austria, Hettich in Germany, and Chuanhu Technology in Taiwan. Judging from the scale of revenue, Agura, Blum, and Hettich are 5 to 10 billion yuan; the downstream of Chuanhu Technology is mainly in the high-end IT sector, and the revenue scale is relatively small. The revenue scale in 2014 was equivalent to RMB 850 million, but the net profit margin was as high as 42.2%. The current revenue scale of Xinghui Precision is around 400 million yuan, and there is plenty of room for growth. 3. Currently, the company's production capacity is 533.6 million inches of slide rails and 65.55 million sets of hinges. After the capital raising project is completed, the company's production capacity of slides and hinges will be increased by 30 million pairs (equivalent to 40 million inches) and 65 million sets respectively. Production capacity will increase dramatically. By the end of the third quarter of this year, the company's capital raising projects have completed 54%. We expect that the new production capacity will be built in the first half of 2016, and the next year will be a centralized release period for additional production capacity. 4. The company is the only domestic listed company in the slide rail and hinge industry. Later, it will use the listed company platform to make full use of capital advantages to carry out epitaxial expansion. Profit forecast: The company's revenue is expected to be 4.5/5.9/780 million yuan from 2015 to 2017, with a growth rate of 15%/31%/32%, net profit of 4353/5600/73.83 million yuan, a growth rate of 10%/18%/34%, corresponding EPS of 0.53/0.68/0.89 yuan, and the first “recommended” rating. Risk warning: The rate of expansion of production capacity is lower than expected; the expansion of product sales channels is lower than expected.