Investment highlights: On October 24, the company released its report for the third quarter of 2017, achieving operating income of 3.151 billion yuan, a year-on-year increase of 109.18%, and net profit to mother of 23.51 million yuan, an increase of 46.57% over the previous year, and EPS of 0.034 yuan. At the same time, the company expects profit of 134-149 million yuan in 2017, showing a significant year-on-year increase, mainly due to the new profit of Runxing Technology's high-end equipment manufacturing business during the reporting period. The main business grew steadily, and profits increased steadily. The parent company's main business is stainless steel trade-related business. Thanks to the company's continuous steady expansion, the business has maintained a good growth trend, trade volume has grown rapidly, and the profit scale has gradually increased. In addition, the company's traditional container handling equipment has also shown an overall recovery trend since this year, and the sales scale has increased compared to the same period last year. At the end of the third quarter, the asset delivery of Runxing Technology was completed, and the acquisition was successfully realized. On September 25, 100% of Runxing Technology's shares were transferred to Huadong Heavy Machinery and became its wholly-owned subsidiary. After the transaction is completed, the company will quickly enter the rapidly growing field of middle and high-end CNC machine tool manufacturing, obtain new business growth points and profit growth opportunities, optimize its high-end equipment product line and profit structure, and diversify the market risks of the original business, further consolidating the company's market position in the field of high-end equipment manufacturing and helping the company achieve the strategic development goals of “high-end” and “intelligence”. Runxing Technology is expected to combine in the fourth quarter, driving a significant increase in the company's profitability. According to the company's profit forecast for the full year of 2017, the profit for the fourth quarter will exceed 100 million yuan. We expect that this is mainly due to the contribution of Runxing Technology, and its annual profit is also expected to significantly exceed its promised 250 million yuan. Optimistic about the development prospects of Runxing Technology, leading 3C processing equipment companies are expected to explode. According to our judgment on the nature of the CNC industry, powerful manufacturers have the ability to become more big customers after receiving support from capital market platforms, and their development will often accelerate. We believe that Runxing Technology, as a leading manufacturer of domestic CNC machines, has great potential for development in the context of downstream consumer electronics component material changes, and we are optimistic that its subsequent performance will exceed expectations. Profit forecasting and valuation. We have raised the company's profit forecast for 2017-2019, and the estimated net profit to mother is 140/4.89/590 million yuan, respectively. Since the supporting financing for the company's additional issuance and raising has not yet been completed, we assume that the issuance will be carried out at 10 yuan/share for a total of 86 million additional shares, then the company's share capital after the additional issuance will increase to 1,014 million shares, and the corresponding EPS is 0.14/0.48/0.58 yuan. Considering Runxing Technology's good growth potential, we gave it 30 times PE in 2018, with a target price of 14.40 yuan, maintaining a “buy” rating. Risk warning. Macroeconomic downturn; CNC equipment sales fall short of expectations.