Investment points The light conveyor belt business is growing steadily: The company is the largest light conveyor belt company in China, with a domestic market share of more than 10%. It is widely supplied in food processing, logistics and transportation, electronics manufacturing and other industries, with a compound annual growth rate of 10% over the past few years. At the same time, with active adjustments in the company's marketing strategy (mainly domestic direct sales) and product structure (the proportion of lightweight thermoplastic elastomer conveyors with higher gross margins has increased), the gross margin of the company's conveyor belt business will continue to grow steadily. At the same time, the company has begun to expand the plastic chain conveyor belt business in lightweight conveyor belts made of new materials, which is an important layout for enriching and perfecting the company's product line in the field of lightweight conveyors. The expansion of the molding business through external expansion has significantly improved the company's performance: the company has entered the molding field through successive acquisitions of Yingdong and Weifeng, and downstream customers are mainly in the fields of steady growth in the automotive, home appliance, and toy industries. On the one hand, it can speed up the company's process of expanding chain plate conveyor belts; on the other hand, compared to conveyor belts, the plastic parts industry serves all sectors of the national economy. The product market demand is large, downstream applications are extensive, and the market space is huge. According to Intelligent Research Information, in 2016, the plastic products industry achieved revenue of 2285.51 billion yuan, an increase of 6.2% over the previous year, opening up broad space for the company to grow over a long period of time. In 2016, Yingdong and Weifeng both exceeded their net profit commitments after deduction for that year. We expect that the two companies will still be quite likely to fulfill their performance promises in '17, which will significantly increase the company's overall performance. Intelligent sorting systems are in their infancy, and the market space is huge: intelligent sorting systems are still in their infancy in China. With the recent listing of logistics companies, informatization and automation will surely become future development trends, and we expect the industry to show a rapid growth trend in the next few years. According to the announcement, the founder of Xinba Technology acquired by the company is a former member of the postal system and has rich practical experience in this field and obvious advantages. Benefiting from the increased demand for intelligence in the logistics industry, industry demand is expected to develop rapidly, and the company's order volume is expected to grow rapidly. Profit forecast and valuation: The company has now formed three types of businesses: lightweight conveyor belts, precision molding, and automated sorting systems. Under the steady growth of the industry, the company's endogenous growth is strong. We expect the company to achieve net profit of 320 million, 390 million yuan and 4.7 billion yuan in 17-19, corresponding to 24 times PE in 17 years. The steady growth of the main business has brought sufficient cash flow to the company. In the future, focusing on the three major business areas, the company is expected to achieve a reasonable extension and expansion of the industrial chain through extension. The initial coverage gave a buying rating, with a target price of $25. Risk warning: Product prices have fluctuated sharply, market competition has intensified, downstream demand has been drastically reduced, and the automation process in the express delivery industry has fallen short of expectations.