Matters: Jubilee Technology (300221) announced on October 18 that it signed a “Strategic Cooperation Framework Agreement” with Huaxin (Democratic Republic of the Congo) Co., Ltd. After negotiations, Huaxin will develop long-term cooperation with the company in three areas: providing raw material support, assisting in the construction of cobalt ore processing plants in the Congo, and finding cobalt ore resources. Our review on this is as follows: Comment: Demand for raw materials has been met, and the cobalt mining and processing business has progressed steadily. The company announced on September 26 that it plans to invest 300 million yuan to establish Guangdong Jubilee Cobalt International Co., Ltd. to open a new chapter in the field of new energy. The subsidiary Jubilee Cobalt is mainly engaged in investment, mining, metallurgical selection and related technical services in non-ferrous metal mines such as cobalt and copper. This strategic cooperation accurately addresses the needs of the Jubilee Cobalt industry on the raw material side, and the signing of long-term cooperation will also provide the company with a strong guarantee to avoid fluctuations in non-ferrous metal prices. In addition, Huaxin has many years of experience in the cobalt metal business, and also has cooperation experience with many outstanding domestic companies, including China Nonferrous Metals Group, in the fields of smelting and mine development, which will also improve the company's technical level and commercial experience. It is proposed to invest in the establishment of a cobalt ore processing plant to promote the layout of the raw material market. Jubilee Technology and its holding company plan to invest in the establishment of a 3,000-tonne cobalt processing plant in the Democratic Republic of the Congo. Huaxin can actively participate, invest in shares or provide raw material supply support according to the actual situation. The Congo is rich in cobalt resources, with reserves of about 50% of the world's cobalt resources. This investment plan will provide a great guarantee for the company's supply of raw materials. Furthermore, Congolese national regulations have begun to gradually restrict the export of raw ore, requiring mineral resources to be processed locally to solve local employment while providing fiscal revenue. Setting up processing plants in the Congo can also ensure that the company's access to cobalt ore complies with local laws and regulations. The comprehensive layout of the industrial chain in the field of new energy has led to rapid development in collaboration with traditional main industries. The company's current cooperation is not expected to have a significant impact on the company's 2017 business performance in the short term, but from a long-term perspective, entering the new energy sector will provide the company with a clear new support point for growth. Currently, new energy vehicles have become a strategic direction for the long-term development of the automobile industry. As a leading enterprise in the modified plastics industry, the company has been providing a large number of products to automobile companies, and through this business expansion, it will further promote partnerships with downstream car companies, consolidate the traditional business, the leading position in the modified plastics industry, and promote comprehensive strategic cooperation between the company and downstream car companies in the long-term transformation of the automotive industry. Risk factors: Cooperation with Huaxin is not progressing smoothly; access to cobalt ore resources is blocked. Maintain a “buy” rating. We maintain the company's 2017-19 EPS forecast of 0.41/0.66/0.82 yuan, maintain the target price to 20 yuan, and maintain the “buy” rating.