Abstract: In the next 20 years, the market demand for domestic mainline and regional passenger aircraft in China is expected to be around 6 trillion yuan, and the number of new airliners will increase by more than 5,000. If demand for renewal and replacement is taken into account, the total potential demand will far exceed 5,000. The average annual growth rate of China's civil fleet size from 2011-2016 is over 10%. During the “13th Five-Year Plan” period, the average annual growth rate of China's civil fleet size is expected to remain around 10%. From 2011 to 2016, the compound annual growth rate of China's defense spending exceeded 10%. During the “13th Five-Year Plan” period, defense construction will continue to advance rapidly. The compound annual growth rate of China's defense spending is expected to exceed the GDP growth rate and is expected to remain between 5% and 10%. In the next five years, China's main fighter models such as the J-20, Yun20, and Direct 20 are expected to be deployed at an accelerated pace. Domestic large transport aircraft alone are expected to be in demand for hundreds in the future, and the market size will be around 400 billion yuan. The company is a leading supplier of private aerospace parts manufacturing. It has 15 years of development experience and is one of the few suppliers in the industry with large-scale development capabilities. With the rapid increase in defense spending and the accelerated installation of new equipment, the company will significantly benefit from industrial growth. Profit forecast: It is predicted that the company's revenue will increase by 60%, 25% and 25% respectively in 2017-2019, with net profit attributable to mother reaching 447 million yuan, 550 million yuan and 703 million yuan respectively, and EPS of 0.31 yuan, 0.39 yuan and 0.48 yuan. Combined with the company's current stock price, the company is given an “increase in wealth” rating. Risk warning: 1) the risk that the equipment update and replacement process falls short of expectations; 2) the risk that the company's main military demand falls short of expectations.