Key investment matters: The company announced its 2017 three-quarter report. In the first three quarters of 2017, the company achieved operating income of 3.8 billion yuan (+2.4%) and net profit of 250 million yuan, a year-on-year decrease of 7.5%. Ping An's view: The third quarter results were under pressure, and gross margin declined due to multiple factors: in the third quarter, the company achieved operating income of 1.11 billion yuan (-11.5%), net profit of 657.65 million yuan (-28.9%), and gross margin was 18.9%, down 4.6 percentage points from the previous year. We believe that the main reason for the decline in performance is the switch between new and old models for international air conditioning customers; Nanjing Aotegen was due to rising raw material prices and rising procurement costs; and in 2017, production capacity was expanded, and sales growth slowed, leading to a decrease in capacity utilization. It is expected that with the increase in the number of new models from customers, the revenue side of air conditioning international will improve. Entering the MEB platform, demonstrating product competitiveness: On September 8, Nanjing Aotejia was identified as the European electric compressor supplier for German Volkswagen's MEB global new energy electric vehicle platform. It will develop, produce and supply electric air conditioning compressors for the SEAT, AUDI, and SKODA European plants of the German Volkswagen MEB electric vehicle platform. Related models are expected to be launched in batches by the end of 2019. The MEB platform has an 8-year life cycle, and global sales volume is expected to reach 6.5 million units. We expect the company's supply to account for about 30%. The company entered the MEB platform, demonstrating product competitiveness. Actively expand new customers, fuel consumption credits help scroll engine capacity: We estimate that the company is currently actively communicating with domestic and foreign OEMs, and is expected to develop more customers in the future. The assessment of fuel consumption points began in 2018. Scroll compressors have good energy saving performance. As a leading company in scroll compressors, the company is expected to benefit from fuel consumption credit assessments in the future. Profit forecast and investment advice: Affected by the slowdown in the growth rate of the automobile industry and rising raw material prices, adjusted the company's performance forecast. The EPS for 2017-2019 was 0.14, 0.18, and 0.22 yuan (the original EPS forecast for 2017-2019 was 0.16, 0.2, 0.24), maintaining the “recommended” rating. Risk warning: The growth rate of the domestic automobile industry is slowing down; the expansion of new customers falls short of expectations.