Incident: The company announced its 2017 semi-annual report. The company's revenue for the first half of the year was 1,937 billion yuan, up 113.81% year on year, and net profit was 19.3 million yuan, up 27.34% year on year. The company expects net profit of 1764 to 22.45 million yuan from January to September 2017, an increase of 10% to 40% over the previous year. The company's performance was in line with market expectations. The company's sharp increase in performance in the first half of the year was mainly due to: ① 2016 container handling equipment orders were delivered to customers during the reporting period to achieve revenue; ② supply-side structural reforms continued to advance and deepen at the government level, the steel industry's ability to stop production was further increased, and the company's stainless steel sector business grew rapidly. It plans to acquire Runxing Technology and enter the metal CNC industry strongly. The company plans to issue shares and acquire 100% of Runxing Technology's shares at a price of 2.95 billion yuan, of which it will pay 826 million yuan in cash, 2.24 billion yuan for issuing shares, issue price 888 yuan/share, and issue 239 million shares. At the same time, it plans to raise no more than 858 million yuan in supporting capital. Runxing Technology's 2017-2019 performance promise net profit will not be less than 250, 3 and 360 million yuan. Runxing is a mainstream manufacturer of CNC equipment in China. Benefiting from the increase in the penetration rate of downstream middle and high-end mobile phone metal frames, the company's CNC equipment is expected to grow rapidly. The main business is gradually picking up, and container handling equipment is expected to grow steadily. The company's original main business was the stainless steel business, which mainly focused on R&D, production and trade of container handling equipment. As inland waterways and coastal container cargo throughput continues to grow, the container handling equipment industry is growing steadily. The stainless steel industry has benefited from the deepening of supply-side reforms, the steel industry is losing production capacity, and the stainless steel business is picking up. Profit forecast and rating: The company's net profit for 2017-19 is estimated to be 0.42, 0.61 and 93 million yuan, corresponding EPS is 0.06, 0.09, 0.13 yuan/share, and corresponding PE is 183, 125, and 82X. Assuming that the acquisition of Runxing Technology is completed in 2017, the company's net profit for the 2017-19 exam preparation is 1.22, 3.81 million yuan, and 473 million yuan, respectively. The corresponding EPS for the 2017-19 exam preparation is 0.12, 0.38, and 0.47 yuan/share, respectively, and the corresponding PE is 91, 29, and 23X, respectively. First coverage, giving the company a “recommended” investment rating. Risk warning: The development of the CNC industry falls short of expectations, and there is a risk that traditional business will decline.