Guide to this report: The “Guiding Opinions” for photovoltaics have been introduced, the market share of monocrystalline silicon has increased, the use of diamond tangents has significantly improved the cost and efficiency of monocrystalline crystals, and the company's new production capacity has been rapidly released. First coverage, “increased holdings” rating, target price of 56.18 yuan. Key investment points: First coverage, “increased holdings” rating, target price of 56.18 yuan. The market has underestimated the PV industry's urgent demand for diamond wire. We believe that the recent PV policy and the increase in monocrystalline silicon penetration rate have brought double impetus to King Kong wire. Technological breakthroughs in polycrystalline diamond wire cutting are even more likely to double the market space for the company's products. Net profit for 2017-19 is estimated to be 0.61, 1.02/138 million yuan, EPS is 1.18/1.96/2.65 yuan, corresponding to 2017, 48 times PE. The photovoltaic industry as a whole is improving, and the increase in the share of monocrystalline silicon is driving the excessive growth rate of King Kong Wire. The National Energy Administration issued the “Guiding Opinions on the Implementation of the 13th Five-Year Plan for Renewable Energy Development”, clarifying that a total of 86.5 GW of photovoltaics were added in 17-20, corresponding to the domestic demand for diamond wire of 11 million kilometers per year, and the photovoltaic market space exceeded previous expectations. The success of PV development depends on cost and efficiency improvements. Diamond wire cutting replaces traditional mortar cutting, significantly reducing the manufacturing cost of single crystals and promoting the increase in monocrystals share in the photovoltaic market. The 1 million km electroplated diamond wire project under construction by the company mainly produces ultra-fine wire (that is, high-efficiency wire). More than half way through construction, the production capacity was increased by about 750,000 km in '17, and the corresponding weighted revenue was about 120 million yuan. According to the announcement and customs records, production capacity is still unable to meet strong downstream demand. At the same time, the product structure is skewed towards the high-end. The high gross margin of the high-efficiency line (about 0.3 yuan/meter) can continue, and further expansion of production is not ruled out. The penetration rate of diamond wire on polycrystalline silicon slices will continue to expand. Diamond wire cutting of polycrystalline silicon has had high technical problems with wire breakage and silicon wafer reflectivity for a long time, but as the polycrystalline silicon faucet solved the velvet problem of silicon wafers through black silicon technology, the technical barriers to polycrystalline diamond wire cutting have been removed. The industry predicts that monocrystals and polycrystals will coexist in the photovoltaic industry for a long time. If black silicon technology is mass-produced, the downstream space of the King Kong line will increase exponentially. Catalysts: New production lines have reached production, and polycrystalline silicon tangents have spread. Risk warning: PV subsidies have declined, and the unit price of King Kong wire has declined.