The main copper and aluminum core electromagnetic wire products closely followed the growth of UHV construction. Aluminum-cored electromagnetic wire is the company's first self-developed product in China. The total production capacity has reached 4,500 tons/year, and its share in the aluminum-cored electromagnetic wire market for power equipment is 40%-50%. Among them, it accounts for more than 90% of the market for transposition aluminum wires used in UHV dry-type reactors. The company's high-end copper-cored electromagnetic wire products are mainly used in UHV, high-speed railways, wind power and other fields. The technical content is high and the entry threshold is also high. Currently, there are few companies capable of participating, and the company has a first-mover advantage. We believe that at present, UHV electromagnetic wire products account for a high proportion of the company's total products. As UHV projects are gradually recognized at home and abroad, and construction demand grows steadily, the company's main product performance will also grow steadily. New product development is progressing smoothly. Tianjin Jingwei Zhengneng Electric Equipment Co., Ltd., a wholly-owned subsidiary of UHV and overseas market companies, is a platform for capital operation and investment in new fields. The high-voltage, high-capacity high-end hollow reactor project is an important layout for extending the company's industrial chain. The technology is world-class, and the main target market is domestic and international high-voltage transmission and distribution networks. At present, the three dry-type hollow reactors have received technical certification from the China Machinery Industry Federation. The technical indicators have reached the international advanced level, and they can be connected to the network for operation. We believe that since this product has the advantages of low cost and excellent indicators, the domestic UHV market will gradually open up this year and next two years; since the product technology comes from North America and conforms to North American standards, it is expected to enter the North American overseas market through overseas agents. Investing in networks to find epitaxial expansion opportunities In addition to developing new products within the industry, the company is also actively seeking epitaxial expansion opportunities. It invested 5 million yuan in the Shanghai Internet Technology Company, accounting for 12.5% of the company's shares. The company is a start-up enterprise focusing on positioning and home security solutions. Currently, the business is developing well, and is expected to be profitable next year. Although the investment amount is small at this time, it can be seen that the company is willing to seek external expansion. We expect that the company will continue to seek high-quality investment opportunities outside the industry to improve its performance space. Profit forecast and investment suggestions: We believe that the company is the main manufacturer of high-end electromagnetic wires in China. Under the steady growth and acceleration of investment in power grid construction, the market demand for transformers and reactors will increase, and the company's copper and aluminum electromagnetic wire business revenue will grow steadily; in the context of the acceleration of UHV construction, we are optimistic about the company's high-end product revenue growth and overall gross margin increase; we are optimistic about the domestic and overseas market opportunities for the company's new high voltage hollow reactor products and the possibility of extended mergers and acquisitions in other industries. The company's 15-17 EPS is expected to be 0.05, 0.08, and 0.14 yuan, respectively, and the corresponding PE is 375X, 227X, and 121X, respectively. It was covered for the first time, giving it a “careful recommendation” rating. Risk warning: UHV project construction falls short of expectations; 2) Market expansion of new products falls short of expectations.