Investment recommendations We predict that in 2015-2017, the company's EPS will be 0.49 yuan, 0.66 yuan, and 0.87 yuan, respectively, and the corresponding PE will be 83 times, 61 times, and 46 times, respectively. The company is a leading supplier of precision metal connectors in China, and its competitive advantage is obvious. As the fund-raising project is gradually put into operation, the company's performance is expected to grow rapidly, and for the first time, it has been covered and given a “recommended” rating. Revenue increased slightly in the third quarter and net profit declined slightly: in the third quarter of 2015, the company achieved operating income of 108 million yuan, up 3.30% year on year, net profit attributable to shareholders of listed companies of 8.91 million yuan, down 5.17% year on year; from the beginning of the year to the end of the third quarter, operating income of 290 million yuan, up 7.24% year on year, and net profit attributable to shareholders of listed companies was 20.7 million yuan, down 7.63% year on year. The reasons for the slight increase in the company's main business revenue include: increased market demand in the downstream industry; the company continues to invest in equipment and technological innovation to increase production capacity; downstream product functions have been upgraded, and the application field of the company's precision metal connector products has been expanded, and the product range has been further enriched, driving sales growth. The reason for the slight decline in net profit is the corresponding increase in fixed asset depreciation, management expenses, etc. after the first phase of the Qingyuan production base project was put into use, but production efficiency did not improve at the same time. In addition, the company's projects under construction increased by 17.3331 million yuan over the beginning of the year, an increase of 227.51%, mainly due to an increase in investment in the Qingyuan Xinghui plant construction. Non-operating income increased by 1,657,700 yuan over the same period last year, an increase of 1011.31%, mainly increasing revenue from government subsidies such as transformation and upgrading subsidies. It has a high position in the industry and obvious advantages in manufacturing technology and customer resources: the company is a leading domestic supplier of professional precision metal connectors integrating R&D, design, production, sales and service. Its main products include slides and hinges, and downstream includes furniture, home appliances, industry, IT, finance, automobiles, etc. The company's competitive advantages in both manufacturing and customers are obvious: 1. Advanced manufacturing technology. Under the trend of rising labor costs and the increasing degree of mechanization and automation in the production of downstream furniture, home appliances, etc., the company has carried out advanced manufacturing technology transformation in traditional industries through extensive use of precision manufacturing technology, automated production technology, and information management technology, and cooperated with Jiangxi University of Science and Technology to establish an automated manufacturing research center to master independent development capabilities of key process equipment, thus achieving transformation and upgrading from traditional manufacturing to advanced manufacturing, and improving product precision, yield and production efficiency. 2. Customer-specific development advantages. The company has established a series of standardized mold modules, which have obvious advantages in continuous stamping dies. It can quickly carry out the whole process of design, proofing, molding and commissioning according to the specific requirements of customers, achieve rapid development, production and delivery of new products, meet the unique requirements of customers, and maintain a rapid response to customer needs. The company has developed internationally renowned customers such as Toshiba Electric, Electrolux, Emerson Electric, Waterloo, Hisense Electric, Midea Electric, Vantage Gas, Wanhe Electric, Stanley, Jiangsu Tongrun, Quanyou Furniture, Meike Meijia, Country Garden Furniture, Sophia Wardrobe, Shanghai Electric Bus New Energy, Lanbei Information, and BYD. In addition, the company also has advantages in mold development and production, convenient one-stop procurement of full-specification products, and comprehensive information management advantages. Fund-raising projects have released production capacity and are optimistic about rapid future performance growth: the company's sales are generally on the rise, but production capacity is limited, and some orders are lost due to production capacity constraints. By the end of 2014, the production capacity of the company's slides and hinges was 533.6 million inches and 65.55 million sets, respectively. The corresponding capacity utilization rates were 97.17% and 95.37% respectively. The main products were operating at close to full capacity, and insufficient production capacity still limited the scale of R&D, production and sales of the company's new products to a certain extent. In order to solve this problem, the company used 92% of the capital raised for a precision metal connector production base construction project. After the fund-raising project is completed, the company will add 40 million inches of slide rail production capacity and 65 million additional hinge production capacity. The project is expected to be put into operation in the 2nd year after the capital raised is in place, and production will be completed in the 5th year. After delivery, it is expected to increase operating income by 391.68 million yuan per year and increase net profit by an average of 41.05 million yuan per year, which is expected to significantly increase performance. The equity incentive plan stimulates the fighting spirit of all employees and achieves the goal of performance growth: The total number of restricted shares to be granted to the incentive target is 1.92 million shares, of which the total number of restricted shares granted for the first time is 1,545 million shares, 42 incentive recipients, and the grant price is 16.75 yuan (the company's closing price yesterday was 40.6 yuan). The conditions for unlocking restricted stocks are: based on 2014 results, the company's operating income in 2015, 2016, and 2017 increased by no less than 15%, 50%, and 100%, respectively; the net profit achieved by the company in 2015, 2016, and 2017 increased by no less than 10%, 30%, and 75% compared to 2014, respectively. On August 24, 2015, the company completed the grant of incentive shares. The equity incentive plan helps stimulate the motivation and creativity of the management team and core cadres of the company and its wholly-owned subsidiaries, enables all parties to focus on the long-term development of the company, fully explore management benefits, enable management to seize industry development opportunities, and ensure the smooth implementation of the company's strategy. Risk warning: Weak market demand has led to a decline in capacity utilization.