The three-quarter report results are in line with expectations. Xinyan Co., Ltd. announced the three-quarter report results: 1-3Q17 operating income of 1.05 billion yuan, up 37.4% year on year; net profit attributable to the parent company was 257 million yuan, up 139.4% year on year, corresponding to profit of 0.17 yuan per share. The 3Q17 company's revenue was 564 million yuan, up 11.9% year on year, and net profit attributable to the parent company was 165 million yuan, up 85.6% year on year. Meets expectations. Tomorrow, aerospace revenue will increase rapidly, and the agricultural machinery sector is still under pressure. The company's revenue increased 11.9% year-on-year in the third quarter. We estimate that tomorrow's aerospace revenue will grow rapidly, but the agricultural machinery business will decline significantly. In terms of gross margin, the company's overall gross margin increased 7.7ppt year-on-year in the third quarter due to an increase in the share of revenue in the aerospace sector with higher gross margins. Expense rates have declined, and net profit margins have increased. In 3Q17, the sales/finance expense ratio decreased by 2.0/6.1 ppt year on year, and the management expense ratio increased by 1.2 ppt year on year. Net profit margin increased 11.6ppt year over year. The company's profit is still mainly contributed by Tomorrow's Aerospace, and agricultural machinery is still facing losses. Cash flow from operating activities turned negative. By the end of the third quarter, the company's inventory/receivables/accounts payable balance had increased by $21/4.4/130 million compared to the beginning of the year. The net cash flow from operating activities in 3Q17 was 89.9 million yuan, an increase of 230 million yuan over the same period last year. Development trends Tomorrow, Aerospace will fulfill its performance promise without worry, and we look forward to further progress in the commercial space and civil aircraft markets. Tomorrow Aerospace promised a net profit of 400 million yuan in 2017. We believe that the performance promise will be achieved worry-free. In the long run, the company actively lays out the civil aviation and commercial space markets. On the one hand, we will jointly expand the civil aircraft market through cooperation with companies such as Airbus and Bombardier. On the other hand, the commercial space market is vast, and we look forward to the further development of aerospace in Tibet tomorrow. Agricultural machinery is still at the bottom, but market expectations are sufficient. It is expected that the agricultural machinery market will still hardly recover in the future. The company's agricultural machinery sector will continue to lose money, but market expectations are already quite adequate. Profit forecast Considering the continued downturn in the agricultural machinery business, we lowered our earnings forecasts per share for 2017 and 2018 by 4% and 13% from RMB 0.31 and RMB 0.47 to RMB 0.29 and RMB 0.41, respectively. Valuation and recommendations Currently, the company's stock price corresponds to 2017/18e 41.6x/29.7x P/E. We maintained the recommended rating, but lowered the target price by 16.0% to RMB 14.28, corresponding to 2018e 35xP/e. Risk aerospace business expansion fell short of expectations.