Sports cameras (GoPro) have good growth prospects, and product order certainty is high; since 2005, the gross margin has stabilized at 20%. With the rapid development of the IP camera market, the company will invest HK$50 million in capital expenses, and production capacity will increase by 50% year-on-year. The company's price-earnings ratio in 2015 was 5.6 times (market expectations), 8.4 times lower than that of peers, GoPro is growing strongly, and the development potential for sports cameras is huge. The development potential for sports cameras is huge, based on Tiancai's 1) good record of over 10 years, 2) high technical barriers (waterproof/ shockproof/video quality) and 3) strong order/minimum purchase quantity agreements. Management believes that excessive market concerns will Tiancai will lose GoPro's order share and the sports camera market growth will slow to 20% year over year. In the first half of 2015, the company shipped 1.6 million action cameras to GoPro, accounting for 54% of total GoPro shipments. Tiancai has always used the JDM model to supply the entry-level Hero+ LCD/HERO (retail price: 199-299 US dollars) to GoPro, while the HERO 4 series (retail price: 399-499 US dollars) is supplied by Qunguang Electronics under the OEM model. Benefiting from the rapid development of the IP camera market, as IP cameras are increasingly widely used in home safety monitoring/child/elderly/pet care, management expects strong growth in the home video business in 2015, accounting for 15% of revenue (2% in 2014). Capital expenditure in 2015 was HK$50 million, mainly for the expansion of production capacity for IP cameras (a 50% increase over the previous year). Tiancai began supplying IP cameras to Netgear in the third quarter of 2014, and the revenue of IP cameras in the first half of 2015 was HK$183 million (shipment volume: 400,000; average price: HK$450), an increase of 3.6 times compared with revenue for the second half of 2014 (HK$50 million). Strong R&D capabilities ensure continued growth Management emphasized that Tiancai has strong R&D capabilities to maintain the company's long-term growth, and will launch more new products, such as smart wearable products, new IP cameras, car cameras, and police cameras. Meanwhile, the company has set up a new R&D center in Xi'an to strengthen software and cloud platform development capabilities, improve video quality (4K video), and develop image analysis technology/new products. Valuation is discounted, but the return on net assets is 5.6 times higher than Tiancai's 2015 price-earnings ratio (market forecast), which is 33% off 8.4 times compared to Hong Kong-listed peers, while the predicted return on net assets for 2015 is 53%, 34 percentage points higher than 19% of peers.