Key investment matters: The company announced its 2017 three-quarter report. From the beginning of the year to the third quarter, the company achieved cumulative revenue of 956 million yuan, an increase of 51.30% over the previous year, realized net profit of 108 million yuan, an increase of 77.82% over the previous year, and the corresponding basic EPS was 0.26 yuan. At the same time, the company released its performance forecast for the full year of 2017. It is expected to achieve net profit of 145 million yuan to 176 million yuan for the whole year, and the corresponding year-on-year growth rate fluctuation range is 90%-130%. Ping An's view: Mergers and acquisitions and endogenous growth have jointly driven a sharp increase in performance: According to financial data from the Third Quarter Report, the company achieved cumulative revenue of 956 million yuan in the first three quarters, an increase of 51.30% over the previous year, and net profit of 108 million yuan, an increase of 77.82% over the previous year. Based on the financial data disclosed in the semi-annual report and the company's explanation of the income statement items in the three-quarter report, we judge the rapid rise in the company's revenue and net profit. On the one hand, it stemmed from the epitaxial expansion effects of the company's merger with Sanqi Communications and Inca Technology since the second quarter, and on the other hand, it also came from the endogenous growth in the company's business scale. The two have jointly driven the company to achieve good performance. The comprehensive gross margin increased, and the cost ratio was stable during the period: The three-quarter report shows that the company's comprehensive gross margin for the first three quarters was 31.86%, up 1.86 percentage points from the same period last year. This may reflect the optimization of the company's business structure, and the proportion of high-end products and front-end equipment projects is rising. In the first three quarters, the company's sales, management and finance expense ratios were 3.10%, 12.40%, and 2.89%, respectively. Compared with changes of -0.76, 0.26, and 0.51 percentage points in the same period last year, respectively, the sales expense ratio may have declined due to scale effects, while the financial expense ratio increased due to increased loan interest expenses and exchange losses. Taken together, the company's expense rate for the first three quarters was 18.39%, the same as the same period last year, indicating that the company's business conditions are steady. The merger and acquisition strategy continues to be implemented, and transformation and upgrading are progressing steadily: in addition to the mergers and acquisitions of Sanqi Communications and Inka Technology, on October 18, the company completed the transfer of 95% of Shanghai Hangsheng's shares, and will be merged in the fourth quarter. Shanghai Hangsheng is a well-known automotive front-loading equipment company in China, with a market share of 20%-30%. Its main products are commercial vehicle entertainment systems and driving recorders. Its main customers include Yutong Bus, Sinotruk, and Jianghuai Automobile. Through the acquisition of Shanghai Hangsheng, it is possible not only to strengthen the position and competitiveness of the company's front-loading business, but also to enter the commercial vehicle market through this. In addition, in early September, Sanqi Communications won the bid for the “China Mobile Terminal Company's Private Brand 4G Wireless Landline Manufacturing Service Procurement Project from August 2017 to August 2020”, with a contract amount of 163 million yuan. This not only provided a guarantee for Sanqi Communications to fulfill its performance commitments, but also made an additional contribution to the growth of the company's extended performance throughout the year. Based on this, we believe that the company's performance growth throughout the year is worry-free and will probably meet expectations. Profit forecast and investment advice: In view of the smooth progress of the company's external mergers and acquisitions, good business development, and steady operation, we maintain our previous profit forecasts. The net profit for 2017-2019 was 1.54, 2.05, and 264 million yuan, with a year-on-year growth rate of 100.8%, 33.3%, 29.1%, EPS of 0.36, 0.49, and 0.63 yuan, and the P/E corresponding to the closing price of October 25 is 51.2, 38.4, and 29.8 times. Under the rapid development of the Internet of Vehicles and the trend of intelligent in-vehicle equipment, we are optimistic about the strategic layout and development prospects of the company's “CID System+Internet of Vehicles Software+Hardware and Smart Cockpit Platform” and maintain the “recommended” rating. Risk warning: increased competition in the Internet of Vehicles market; downturn in the downstream automotive industry; risk of impairment of goodwill.