The domestic consumer electronics foundry industry chain is being restructured. Smart homes and wearables have brought about diversification of product forms. The Internet, e-commerce, and virtual operators have diversified OEM customers, and foundries with integrated solution capabilities welcome new opportunities. Since its launch, Zhuoyi Technology has formed an integrated capability of OEM production, R&D and design, and mold injection molding. PON terminals and smart phones have been released, and smart module products are expected to enter the field of smart homes and wearable devices. The alternation of old and new management levels and the adjustment of management structures will inject new vitality into the enterprise. The EPS for 13-15 is expected to be 0.46/0.60/0.78 yuan respectively, maintaining the “Prudent Recommendation - A” rating. It is recommended to focus on changes brought about by internal growth and extension of enterprises. The domestic consumer electronics industry chain is being restructured, and Zhuoyi Technology has ushered in diversified opportunities. Companies represented by Xiaomi have created an “asset-light plus e-commerce channel” terminal profit model, and with the development of e-commerce, e-commerce channels have become a key direction for channel transformation for terminal companies that originally relied on operator channels, such as ZTE and Huawei. The promotion of e-commerce channels will drive some Internet companies, e-commerce companies, virtual operators, etc. to launch their own branded terminals. The diversification of customers places higher demands on the ability of OEM companies to integrate terminal solutions. This is where Zhuoyi Technology has gradually accumulated advantages since its launch. In the future, the intelligent restructuring of consumer electronics will bring opportunities, and the company's WiFi, Bluetooth and other modules are expected to benefit the smart home and wearable markets in the future. The company's smart module products are expected to enter smart homes and wearable devices. The short term is conceptual hype, but judging from long-term trends, smart homes and wearable devices will dominate the future home consumer electronics and personal consumer electronics markets. Driven by new technology, in addition to new demand in the OEM market, demand for smart modules will also increase, including WiFi, Bluetooth, Zigbee, and LTE modules. The emergence of new product forms and intelligent restructuring based on traditional consumer electronics products will bring new order opportunities to upstream foundries. The transition between old and new management injects fresh vitality into the enterprise. In 2013, the company's top management underwent structural adjustments, gradually transitioning from the original Iron Triangle structure (Mr. Tian, Mr. Xia, Mr. Cheng) to a flat and fast management structure dominated by Mr. Xia, who had strong wealth, and directly managed all of the company's major business divisions. With the new product launch cycle and channel inventory turnover of the entire consumer electronics industry being drastically reduced, we believe that the company's current management structure will be more adapted to changes in new markets and new customer needs. The company recently announced a plan to reduce the shares of the former chairman, while the current chairman proposed a plan to increase his holdings, which also reflects the changes in the company's management system and the optimism of the new management about the long-term development of the company. Expand downstream e-commerce channels through extended acquisitions. In addition to diversifying customers, the company's overseas channels have also become more diversified. In the past, white-label consumer electronics exports were dominated by integrated supermarket channels such as Walmart and Best Buy. With the development of e-commerce channels, new channel sales systems such as Amazon and Groupon have become more flat, bringing new market opportunities to domestic foundries. Zhuoyi Technology recently announced that its subsidiary, Zhongguang Video, plans to acquire 100% of the shares in channel provider Double Power to further expand the e-commerce market in North America. Production capacity increased steadily during the peak consumer electronics season in the second half of the year. The company currently has more than 50 production lines (34 at the Songgang base in Shenzhen, 7 in Xiamen, and the rest are production lines in Tianjin). The 3rd and 4th quarters are the peak consumer electronics season, and the company's production capacity is gradually being released. With the exception of the Tianjin factory area, the current capacity utilization rate of the Shenzhen and Xiamen production lines remains around 90%. In the future, with the expansion of new customers and the introduction of new products such as new consumer electronics and smart homes, production capacity will also increase steadily. New market changes inject new vitality into enterprise development and maintain “Prudent Recommendation-A”. The company predicts a net profit of about 93.43 million yuan to 123.16 million yuan, an increase of 10%-45% over the previous year, of which profit for the fourth quarter alone was 2235-52.08 million yuan. The performance growth rate was slightly lower than our expectations at the beginning of the year, but it maintained a revenue forecast of around 2 billion yuan throughout the year. At the same time, with changes in the new product structure, gross margin remained stable. The characteristics of OEM enterprises determine that the development of new customers and new products requires time to digest for the transformation of performance. The current chairman of the company proposed a plan to increase holdings and plans to implement equity incentives under a restricted stock plan. In response, the outlook is promising. In summary, we have adjusted the 14-15 EPS appropriately. It is estimated that the 13-15 EPS will be 0.46/0.60/0.78 yuan respectively, maintaining the “Prudent Recommendation - A” rating. Risk warning: order release is lower than expected, labor costs are growing too fast, and depreciation pressure on new plants and equipment is too high