Key investment events: On July 1, Baoxin Technology announced the award of stock options to incentive targets. The current stock options grant date was June 30, 2015. The exercise price was 24.60 yuan, the number of shares granted was 7.669 million, and 852,000 shares were reserved. Our comments on this are as follows: The exercise price is higher than the current stock market price, and interests are deeply tied! 1) Management has obtained a large number of options and is full of motivation to do things. Dragged down by the general market, Baoxin Technology's stock price fell to 22.55 yuan today, lower than the stock options exercise price of 24.60 yuan. In Baoxin Technology's core team, the general manager, deputy general manager, financial director, and director have each received 117, 40, 200,000, and 200,000 stock options, which is full of motivation to work. 2) The exercise conditions highlight high growth, and the CAGR reached 80% in 15-18. The exercise conditions are based on 14 years, and the net profit growth rate after deduction in 16-18 was not less than 500%, 800%, and 950%; the corresponding CAGR was 80%, and the year-on-year growth rate was 145% in 15-16, highlighting the high growth rate of the company's business. 3) The exercise conditions are still conservative, and the future is likely to exceed expectations! Taking the 16-year performance as an example, the exercise conditions required a net profit of 97 million yuan, while the 16-year performance promise of Youzhi Technology, which had previously acquired Youzhi Technology, reached 58 million yuan. With the sheet metal business of the headquarters achieving high-end equipment manufacturing transformation (expected to achieve compound growth of 20% to 30%) and the Shanghai Apani business continues to expand, there is a high probability that the performance will exceed expectations. The implementation and promotion of Apani's high-end technology is becoming more and more accurate. 1) The construction progress of the model project is good, and the technical advantages are obvious. Two model projects for the Apani high-voltage electrode boiler are about to be delivered, and progress is good. High-voltage electrode boilers are an economical solution that simultaneously meets environmental requirements and is warmly welcomed by local governments and institutions. 2) The gross margin of the project is high; there is room for further growth in direct electricity purchases. According to our estimates, the gross profit margin of Apani's operations is 25% to 30%; operating costs are mainly electricity prices. In the future, as the direct electricity purchase policy becomes more clear, there is room for further increases in yield. 3) The marketing prospects of core technology are good. Since they do not meet environmental emission requirements, there are more than 70 boilers in Jinan alone that need to be modified, and there are more than 1,000 boilers in the city to be reformed. The Shandong Cancer Hospital project and the Shijiazhuang Vocational College project are the company's two sample projects, which have broad prospects for future promotion in North China. Investment advice: Maintain an increase in holdings rating. We forecast Baoxin Technology's net profit for 15-17 to be 0.9/1.5/220 million yuan, and EPS to be 0.33/0.54/0.80 yuan. In the future, with the release of Youzhi and Arpani's performance, Baoxin's high-end equipment manufacturing platform is about to take off. Baoxin has been our main recommendation target since September '13. It grasps major trends in the industry and has continued to recommend it for nearly 2 years. The logic is consistent! We think Baoxin's performance has only just begun to be realized, and I continue to highly recommend it! Risk warning: Youzhi Technology and Apani's business promotion fell short of expectations