Investment highlights: Event: On the evening of October 25, 2017, the company released its three-quarter report. In the third quarter of 2017, the company completed revenue of 29.62 million yuan (YOY 7.32%) and realized net profit of 5.9857 million yuan (YOY 77.12%). In the first three quarters, the company achieved revenue of 114 million yuan (YOY -0.45%) and realized net profit of RMB 22.55 million (YOY 4.16%). There was a sharp recovery in the third quarter results. In the third quarter of 2017, the company's revenue increased 2.2 million yuan year on year (YOY 7.32%), and gross margin increased 4.04 points year on year, so gross profit increased 2.03 million yuan year on year (YOY 17.81%). In addition, three fees decreased by 340,000 yuan (YOY -5%), asset impairment decreased by 430,000 yuan (YOY -45.36%), and non-operating profit increased by 400,000 yuan (YOY 40%), so total profit and net profit for the third quarter increased by 3.09 million yuan (YOY 72.71%) and 2.61 million yuan (77.22%), respectively. The overall performance of the first three quarters increased slightly due to the military delivery cycle in the first half of the year. The company's overall performance in the first half of the year was poor, and the company's overall performance in the first half of the year was poor, so revenue for the first three quarters fell slightly by 520,000 yuan (YOY -0.45%) year on year. As gross margin increased by 0.65 percentage points year on year, gross profit increased slightly by 500,000 yuan (YOY 0.92%) year on year (YOY 0.92%). Furthermore, although the three fees decreased by 2.78 million yuan year-on-year (YOY -12.09%, of which management expenses were reduced by 1.66 million yuan and financial expenses by 1.27 million yuan), operating profit declined by 490,000 yuan (-1.91%) year on year due to asset impairment increased by 3.47 million yuan (YOY 75.93%, mainly due to asset impairment of 3.9 million yuan in the first half of the year). However, thanks to a year-on-year increase in non-operating income of 1.38 million yuan (YOY 132.69%), net profit ultimately increased slightly by 900,000 yuan (YOY 4.16%). Inertial navigation is a popular product, and the sales ratio of laser inertial guidance has increased, and I am optimistic that the future will benefit from the high prosperity of the helicopter industry chain. The company's aviation inertial navigation products are mainly used in platforms such as helicopters, transport aircraft, and drones. Among them, the sales ratio of laser inertial guidance products with higher value has increased since 2016. According to our in-depth report on China Aviation Mechatronics on October 18, “China Aviation Industry's Aero Mechatronics Platform, Military and Civilian Products Market Space is Expanding, and Group Asset Integration is progressing in an orderly manner”, it is estimated that in 2016, China will have 809 military helicopters. According to US forecasts, in the future, China will form 15 land aviation brigades plus 2-3 air assault brigades. The total number of corresponding helicopters will exceed 1500, so there is huge space for loading. We believe that in the future, the company's habitual business is expected to continue to benefit from the high prosperity of the helicopter industry chain. Aero-engine electronic products: leading collector generators for domestic-funded helicopters, mass production of flight control computers began, and engine electronic control systems completed pre-research and acceptance. The company is the largest supplier of helicopter engine parameter collectors in China. At the same time, the newly developed flight control computer has begun mass production, and the sales price is higher than that of other aviation electronics products, and the sales volume is also relatively large. Furthermore, the engine electronic control system independently developed by the company on the basis of an existing engine parameter collector and flight control computer has completed project acceptance in the pre-research stage, and is worth looking forward to in the future. Professional technical services: A development contract project has been accepted. The company's professional technical service business mainly provides customers with professional technical services related to aviation inertial navigation and engine electronics. The scope of customers includes the military, engine manufacturers, and research institutes. Benefiting from a certain type of development contract, which met the requirements of development and agreement through various indicators, the revenue was confirmed after the project passed the inspection, and the company's professional technical service revenue achieved revenue of 12.5 million yuan in the first half of the year (YOY 215.67%). Profit forecasts and investment advice. The company's 2017-2019 EPS is expected to be 0.67, 0.82, and 1.06 yuan, respectively. Considering the company's pure military standards, refer to the average PE valuation level of comparable companies in 2017 and give the company a PE valuation of 70 times that of 2017. The target price is 46.90 yuan to maintain the “buy” rating. Risk warning. Uncertainty about military orders; development of new products is not progressing as expected.