Event: The company released its report for the third quarter of 2017. In the first three quarters, the company achieved operating income of 100 million yuan, an increase of 16.68% over the previous year, and realized net profit attributable to shareholders of listed companies 10,000 yuan, an increase of 46.55% over the previous year. Market demand is growing rapidly, and power semiconductors are a period of opportunity. With the rapid growth of the NEV industry, the market demand for high-end power semiconductors continues to grow. According to the “13th Five-Year Plan for the Development of Strategic Emerging Industries”, production and sales of more than 2 million vehicles for that year will be achieved by 2020, with a cumulative production and sales volume of 10,000 vehicles. IGBT is the core semiconductor power device in new energy vehicles and DC charging stations. We believe that, driven by the rapid development of the new energy vehicle industry, domestic IGBT and its IPM (intelligent power module) market demand will achieve simultaneous rapid growth. Currently, IGBT and IPM are used as separate functional modules in applications. They are mainly occupied by major international manufacturers such as Mitsubishi, ST, and Infineon. Domestic manufacturers are relatively backward, and there is plenty of room for replacement. Under the high growth of the industry and the trend of autonomy and control, domestic high-end power semiconductor manufacturers will usher in a period of historical opportunity, and manufacturers that are the first to achieve breakthroughs in localizing high-end devices, such as IGBTs, are expected to achieve rapid development. Product systematization has outstanding advantages, and IGBT opens up room for growth. The company continues to increase its product serialization process, gradually shifting from a single device supplier to a solution provider. At present, the company has established a domestic competitive power semiconductor device product line, including high-end diodes, single and bidirectional silicon controlled silicon, high voltage MOS series, low voltage series, and trench-FS IGBT. While maintaining its product advantages in the consumer electronics field, the company continues to increase its high-tech research and development efforts. According to the company announcement, at present, the company's sixth-generation IGBT products have been successfully developed and received good application feedback in the fields of new energy vehicles, charging piles, and inverter home appliances. We believe that the company has leading technology and outstanding manufacturing technology in the field of new energy vehicle IGBTs, and is expected to achieve a domestic breakthrough in the field of high-end power semiconductors and open up room for growth. Investment advice: Buy-A investment rating. We expect the company's net profit from 2017 to 2019 to be 110 million, 169 million, and 229 million yuan respectively. The net profit growth rate is 171.9%, 35.3%, and the corresponding EPS is 0.15, 0.23, and 0.31 yuan/share, respectively. Considering the trend of industry resource integration, the company has strong endogenous and epitaxial development expectations; the military/new energy industry needs an urgent breakthrough, and high value-added products continue to optimize profitability. In view of the high future performance growth and potential breakthroughs in the industry's high valuation center, the 2017 dynamic PE 70X was given, and the target price for 6 months was yuan. Risk warning: Macroeconomic downturn, product expansion in new application areas falls short of expectations