Matters: On September 26, 2017, Jubilee Technology (300228) announced that it signed an “Investment Cooperation Agreement” with Jia Jun and Zhang Zhixiang to jointly invest 300 million yuan to establish Guangdong Yinxi Cobalt International Co., Ltd. (hereinafter referred to as the target company). Among them, the company initially invested 75 million yuan in registered capital, accounting for 75% of the shares; subsequent investment amounts were distributed in batches according to operating needs and distributed according to shares. The target company will be mainly engaged in investment, mining, metallurgy and related technical services in non-ferrous metal mines such as cobalt and copper; R&D, production, processing and sales of new metal products such as cobalt salts, cobalt powder, and electrolytic copper (excluding hazardous chemicals) and related technical services; import and export commission agents for metal mineral products and crude products; import and export business of commodities and technology; investment and consulting services related to cobalt ore resources and the cobalt mining industry chain. Comment: Lay out the lithium battery raw material industry and cultivate new performance growth points. New energy vehicles are listed as a national strategy and have always received great attention from relevant government departments. Sales of new energy vehicles are expected to reach 720,000 units and 2.1 million units in 2017 and 2020. At the same time, demand for ternary materials (currently mainly nickel-cobalt-lithium manganate) will explode as new energy vehicles gradually penetrate the energy density requirements of traditional automobiles. According to market expectations, every 1 million NEVs produced will generate demand for 60,000 tons of ternary materials. Therefore, as an upstream raw material, cobalt ore has clear advantages on the demand side. We expect that the company's current incident will not have a significant impact on the company's production, operation and performance in the short term; in the long term, it will greatly increase its profit level and become one of the company's important growth points in the future. Bringing in industry experts to create technical advantages. The company plans to introduce Jia Jun and Zhang Zhixian as shareholders to create the target company's technical advantages by using their respective professional experience and technical expertise to establish the target company's technical advantages. Among them, Jia Jun has many years of experience in the non-ferrous metals industry and is a senior expert in the field of cobalt metals; Zhang Zhixiang is the general manager of Nittai (Shanghai) Automobile Standard Parts Co., Ltd., who has been in the auto parts industry for more than 15 years and has rich experience, and is an expert in the field of automotive metal materials. Fully penetrate the NEV industry chain and consolidate the leading position of modified plastics. The company has been deeply involved in the field of modified plastics for many years and has been supplying customers in the automotive sector; the field of materials for new energy vehicles is also one of the important directions in the company's development strategy. The company's current layout of lithium battery upstream metal materials is a key step in its layout in the field of materials for new energy vehicles. Other actions are not ruled out in the future. The development and production of upstream materials will further enrich the company's participation in the industrial chain. It is expected to strongly promote the penetration of the company's traditional modified plastics business into NEV customers, cultivate and explore new business growth points, and further promote sector performance growth. The 320 million yuan accounts receivable debt with LeTV was settled using the “debt-for-equity swaps” method, and the shortfall has already been eliminated. The holding subsidiary Xingke Electronics signed a “Debt Restructuring Agreement” with Lucky and Wu Meng LeTV Mobile on August 21. The latter paid the arrears to Xing Ke Electronics using 6.1275% of EasyGo's 6.1275% and Dongfang Che Cloud's 6.1275% shares, respectively. Among them, EasyGo and Dongfang Cheyun collectively refer to “Easy Access to Vehicles” (VIE structure). On August 23, the overseas share transfer of the transaction was completed, and the domestic share transfer continues to advance. We believe that the negative impact and potential problems of the LeTV incident on Xinko's performance have been completely eliminated. 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. The company established a joint venture to establish a cobalt industry company to lay out the most scarce metal raw materials in the upstream of lithium batteries; the partner partner is a senior industry expert with resources and technology. This investment project will promote the company's development in multiple dimensions, such as increasing performance and upstream penetration back into the traditional modified plastics business downstream. We are fully optimistic about the company's layout in the new energy industry chain, and Xingke has already set sail again after digesting the “LeTV” incident and raised the company's 2017-19 net profit forecast to 2.04/3.29/412 million yuan (the original forecast was 1.62/2.51/316 million yuan), corresponding EPS to 0.41/0.66/0.82 yuan (the original forecast was 0.32/0.50/0.63 yuan). The target price was raised to 20 yuan to maintain the “buy” rating.