The report explains that the company announced that it signed a “Strategic Cooperation Framework Agreement” with the Fengtai County People's Government to invest in the construction of a local high-efficiency module photovoltaic industry project. The project is expected to achieve a total production of 1.5 GW of modules within 3-5 years, with an output value of about 4 billion yuan. Key investment points, a new team, and a new atmosphere, helped the company break through the photovoltaic business. The company's history has always had some photovoltaic business, but the volume is not large and the order quality is average. Under the leadership of the current new management, the company has reinvigorated the photovoltaic business, bringing new profit growth points to the company. According to the interim report, the company purchased 51% of Anhui Zhonglujing's shares for 1 yuan, making preparations to boost the photovoltaic business. On August 22, the company announced that it had signed a strategic cooperation agreement with China Building Materials Junxin and Yingli Energy for 1.58 billion PV orders. The total amount of agreements signed with the Fengtai County Government reached 1.5 GW, and the amount is expected to exceed 4 billion dollars. It mainly belongs to poverty-alleviation photovoltaic projects and distributed photovoltaic projects. We believe that according to the nature of such projects, the reasonable production and construction promotion cycle is about 3 years, which means that the company will generate about 1.3 billion new PV project revenue every year. Because the company adopts an asset-light model, that is, after purchasing raw materials according to project schedule requirements, it is outsourced to directly supply the required components, etc. to the project, and does not own the project itself, so there is no pressure on capital turnover. Also, due to the type of project, the company's cost ratio for channel and order expansion will be lower than that of ordinary photovoltaic projects, and the net interest rate of projects under this framework agreement will also be higher than that of ordinary photovoltaic projects. We conservatively estimate that if the current PV order progresses smoothly, according to current order expectations, the company will generate revenue of about 500 million in the PV business this year, with a corresponding net profit of about 15 million. Next year, it will generate revenue of about 2.5 billion dollars, and the corresponding net profit will be about 150 million yuan. According to our original forecast of the company's performance plus the increase in photovoltaics, the company is expected to reach about 280 million next year. Judging from the company's current market value of 8.4 billion yuan, the company's valuation next year will be 30 times higher, and the allocation value is prominent. The transformation of the Internet of Things industry is beginning to appear. Companies with steady growth in traditional main businesses began laying out new businesses last year and are taking steps to transform. Through the acquisition of Asia Data, Nantong Qiyun, and participation in three companies, Beijing Computing Cloud, and combining its own smart terminal display production capacity, the smart home IoT layout was initially built to create an “end+cloud” ecological platform. Overall, it began contributing revenue and profit this year, and is expected to maintain a high growth rate in the next few years. Currently, the company has achieved zero breakthroughs in IDC and its value-added business, achieving 56.62 million in revenue, and a gross margin of 48.37%. In terms of traditional main business, the continuous strengthening of refined management since the second half of last year has effectively controlled costs, while actively developing customers to maintain a steady increase in revenue, keeping the company's traditional business conditions improving. The combination of the two factors made the company turn a year-on-year loss into a profit, and net profit after deduction from -40.39 million yuan to 1.05 million yuan. We have previously analyzed that the company's main net profit was the contribution of the second half of the year. Judging from the current situation, as we expected, even if the second half of the year remains the same as last year, its performance will increase by more than 100%. Under the company's original main business maintaining a steady growth trend, there will be no drag on the transformation. In the future, the high-tech reserve project will also boost the company's participation in ClearLink, a leading international electronic ink company, and Suzhou Green Feng Nano Technology. The former has developed color dynamic electronic ink technology and received international awards. It is currently in the product implementation stage. Its technology has a very high threshold, and the company enjoys exclusive licensing rights in China, which is very promising. The latter is the world's leading company for high-quality thin-layer graphene. Currently, its products are mainly used in the lithium battery industry, and it is cooperating with many lithium battery companies. Profit forecast and valuation We expect that in 2017-2019, the company will achieve revenue of 3.339 billion, 3,524 billion yuan, and 3,744 billion yuan, net profit of 83 million, 118 million, 136 million, EPS 0.10 yuan, 0.14 yuan, and 0.16 yuan, corresponding to PE of 78 times, 56 times, 49 times, and a CAGR of 39.35%, respectively. We believe that the company takes the initiative to ensure the stability of its main business through management and R&D while transforming the blue ocean market and has high-tech business reserves. It is at an inflection point in development, has allocation value, and is rated as “increase in wealth”. In addition, our pre-computing cloud-related business profit is expected to be consolidated into the company in 2018. After the increase, the company will achieve net profit of 83 million, 136 million, 177 million, EPS 0.10 yuan, 0.16 yuan, and 0.21 yuan respectively, corresponding to PE of 78 times, 49 times, 37 times, and a CAGR of 51.44%.