Note: The company released its earnings forecast for the first three quarters of 2017 on October 13. It is expected to achieve net profit of approximately RMB 148.26 million to RMB 163.09 million for the first three quarters, or +0% to 10% year-on-year, with a steady increase in performance. The increase in the company's performance was mainly due to the rapid growth of the modified plastics business, which led to an increase in sales revenue and profit, and the wholly-owned subsidiary Xingke Electronics made good profits. Our review on this is below. Comment: The modified plastics business is growing steadily and is a leader in the industry. The company has been deeply involved in the modified plastics business for many years, and its performance has grown steadily, mainly because: 1) early production capacity expansion and R&D investment brought significant scale effects. In the context of supply-side reforms, the company is invincible in the industry with excellent professional standards; 2) the company's refined management has a good level of cost reduction, and its leading position strengthens downstream bargaining power, which ensures the growth rate of main business performance and steady leading position. Xingke Electronics promotes diversified customer development, and dual engines drive performance forward. Xingke Electronics, a wholly-owned subsidiary of the company, has full-process production technology achieved by very few domestic enterprises in the field of CNC precision metal structural parts, and also has a good customer relationship. Affected by the LeTV problem, Xinko's performance declined at the end of last year and the beginning of this year. Xing Ke actively adjusted its strategy and diversified its customers. Revenue for the second quarter was already reversed. The reason was that LeTV's revenue was only 21,300 yuan, and there was no dependency on major customers. Currently, Xing Ke supplies the latest Hammer phones, and is also entering the supply chain of famous brands such as Brand A, OPPO, Meitu, and Xiaomi. Orders from a best-selling TV brand are also being picked up one after another. Future performance is expected to continue to improve. Along with traditional modification businesses, dual engines drive performance growth. “Debt-for-equity swaps” completely digested the LeTV incident, and Xingke set sail again. Xingke signed a “debt restructuring agreement” with Lucky and Wu Meng LeTV Mobile on August 21. The latter paid the arrears of 322.9 million yuan and 1.85 million yuan to Xing Ke Electronics using 6.1275% of EasyGo's shares and 6.1275% of Dongfang Cheyun's shares, respectively. At this point, the negative impact and potential problems of the LeTV incident on Xingke's performance have been completely eliminated. With the layout of lithium metal raw materials, new performance growth points can be expected. New energy vehicles are on the rise, and are listed as a national strategy for promotion. Sales are expected to reach 2.1 million units in 2020. At the same time, as energy density requirements for NEV power lithium batteries increase, demand for ternary materials (currently mainly nickel-cobalt-manganate) will explode, favoring the demand for upstream cobalt ore. The company recently established a joint venture with industry experts to establish Guangdong Jubilee Cobalt Industry to lay out scarce metal materials upstream of lithium batteries. In addition to increasing performance, it will further enrich participation in the industry chain, feed back the traditional modified plastics business to infiltrate NEV customers, explore new performance growth points, and further increase profits. The company continues to expand its market share for products in other fields. Jubilee Optoelectronics, a subsidiary of the company's LED modified plastics business, entered the new third board in June last year, with high performance in the first half of the year. At the same time, the company is actively developing the 3D printer business, and the cauldron production line has been officially put into operation, making production capacity and technical reserves. It is foreseeable that when the next round of growth in the 3D printer business begins, the company will usher in a new wave of performance growth. Risk factors: 1. Competition in the modified plastics and metal CNC industry is intensifying; 2. Investment and development of metal raw materials such as cobalt is uncertain; 3. Raw material prices fluctuate. Profit forecasting, valuation and investment advice. We maintain the company's 2017-19 EPS forecast of 0.41/0.66/0.82 yuan, maintain the target price of 20 yuan, and maintain the “buy” rating.