Matters: The company released its 2017 three-quarter report. In the first three quarters, the company achieved operating income of 904 million yuan, an increase of 130.79% over the previous year, and realized net profit of 143 million yuan, an increase of 265.65% over the previous year. Key points 1. In the first three quarters, the company achieved a 130.79% year-on-year increase in operating income from consolidated subsidiaries. The main reason for this was the addition of subsidiaries and the expansion of the sales scale of the company headquarters. The company achieved a 265.65% year-on-year increase in net profit, which was far higher than the revenue growth rate. The gross margin of the company's products has remained stable, and the management expense ratio has been reduced by 8.7 percentage points. Mainly, the current equity incentive expenses have been drastically reduced, the sales expenses ratio has decreased by 0.7 percentage points, and the financial expenses ratio has decreased by nearly 0.5 percentage points. 2. The prosperity of the PCB industry is picking up, and the company is expected to maintain growth in the future, and the PCB industry boom is picking up. The shortage of raw materials and price increases will accelerate the trend of increasing the concentration of the PCB industry. Downstream automotive electronics, small-pitch LEDs, and mobile communication technology will drive PCB demand growth. The company closely follows market changes, insists on innovation and upgrading, and actively expands new customers. The market promotion of PCB testing equipment, laser equipment (drilling, marking, cutting), and cutting equipment has made good progress, and is expected to continue to grow in the future. 3. The continuous improvement of the layout of lithium battery automation equipment will share the dividends of lithium battery development and the boom in the lithium battery industry. The company will continue to enrich lithium battery equipment products and expand market space. The company's X-ray automated inspection series equipment has formed a monopoly situation. The subsidiary Xuanshuo's lithium battery PACK automatic assembly production line R&D project is in the prototype trial production stage. Polar laser cutting equipment has completed prototype testing and achieved zero order breakthroughs, which will become a new growth point for the company's profits. 4. External mergers and acquisitions improve the intelligent layout, and the company's performance will continue to increase. The company will continue to deepen its “four-wheel drive” strategy, with intelligent equipment and high-end materials as the front wheel, company management and capital management as the rear wheel, strengthening technical strength through endogenics, and improving the layout in the field of automation through epitaxial mergers and acquisitions such as Hibble, Peng Yuwei, and Xuanshuo, etc., and is expected to achieve comprehensive collaborative development. On September 29, the company announced that it completed the acquisition of 80% of the shares of Jiukunxin Information with 96 million yuan in cash. Jiukun Information is a high-tech enterprise specializing in intelligent manufacturing/Industry 4.0 overall solutions. It can provide customers with integrated solutions for intelligent manufacturing based on IoT technology, promising that the net profit after deducting non-recurring profits and losses in 2017, 2018, 2019 and 2020 will not be less than 600, 900, 12 and 15 million yuan, respectively. Through mergers and acquisitions of Jiukun Information, the company can connect information between the company and subsidiary companies, and enhance the company's competitiveness and production efficiency. On October 19, the company announced plans for the non-public issuance of A shares. It plans to issue no more than 3942,1554 shares, raising a total capital of about 927 million yuan. Adding functional film materials for intelligent equipment manufacturing and FPC will enhance the company's comprehensive competitiveness and influence in the fields of intelligent equipment such as high-end LCD modules, lithium batteries, elevators, etc., and high-end electronic materials, including functional film materials. 5. Profit forecast: The company's net profit for the 17-19 exam is estimated to be 223 million yuan, 418 million, and 548 million yuan. The corresponding EPS is 1.13 yuan, 2.12 yuan, and 2.78 yuan, and the corresponding PE is 35X, 19X, and 14X; the recommended ratings are maintained. 6. Risk warning: New business development fell short of expectations.