Basic conclusions, value assessment and investment recommendations Domestic ODM leader for rechargeable backup lighting and rechargeable fans: The company is engaged in the development and production of rechargeable backup lighting products (including lighting, flashlights, fire emergency lights) and rechargeable AC/DC fans (including desk fans and floor fans). The revenue in 2012 was 560 million yuan (YoY 12%) and net profit was 62 million yuan (YoY 16%). The company's business model is mainly ODM exports, where export revenue accounts for 70% of stock trading, and the main market is Asia; the domestic sales brand “KENNEDE” contributes about 10% of sales revenue. Currently, LED lamps account for more than 60% of the company's sales of lamps. Demand for rechargeable backup lighting products is expected to increase steadily in the future: the main markets for rechargeable backup lighting products are: 1) developing countries and regions with unstable electricity supply; 2) outdoor leisure and sports markets; and 3) backup lighting markets for fire protection and public facilities. From 2008 to 12, the export value of rechargeable backup lighting in China maintained a relatively rapid growth. Due to poor infrastructure in Asia, Africa, and Latin America, and some countries do not give priority to guaranteeing civilian electricity, the gap in civilian electricity will persist for a long time; while the outdoor leisure market continues to develop, it is expected that demand in the backup lighting market will increase steadily in the future. The competitive landscape of the lighting market is very fragmented, and increasing concentration will be a trend in the long run. The company is the largest exporter of rechargeable lighting products in China. Its competitive advantages are mainly reflected in scale advantages, R&D advantages, and flexible manufacturing advantages. In the future, the product line will be extended along the technology path of both rechargeable and AC/DC, and it is expected that it will not enter the general lighting field in the short term. The company's operating indicators such as accounts receivable turnover ratio, inventory turnover ratio, and operating cash flow performed well, but the net interest rate was as high as 10%, and the sales expenses ratio was only 1%. It is anticipated that in the future, the company may need to invest more in sales expenses to cope with fierce competition. Fund-raising projects are mainly used to expand production and build R&D centers, which will help ease the limitations of insufficient production capacity and enhance R&D capabilities. Profit forecast and investment advice: The company's 2013 performance declined due to increased costs such as plant relocation and financial expenses, and increased significantly in 2014 due to sales recovery and interest income contributions, and the growth rate fell back to normal in 2015. The company's 2013-2015 revenue is expected to be 560, 67 and 750 million yuan, up 0.7%, 19.4%, and 11.8% year on year, and net profit of 0.39, 0.59 and 66 million yuan, up -36%, 50%, and 11% year on year, of which the 2014 EBIT growth rate was 13%. Since the probability of overfunding is low, assuming that the number of shares issued is 23.35 million shares, the corresponding EPS is 0.42, 0.64, and 0.71 yuan. Compared with existing lighting companies in the A-share market, Jinlight is in a smaller rechargeable backup lighting market, and is mainly exported by ODM, so comparability is weak. We refer to the valuations of export ODM companies and consider market sentiment factors to give them a certain premium. We give the company 16-19 × 14 EPS, and the corresponding target price is 10.16-12.06 yuan.