The revenue recognition of military enterprises is highly cyclical, and they are optimistic about annual performance growth. The company announced its 2017 three-quarter report. It achieved revenue of 819 million yuan, an increase of 10.92% over the previous year, and net profit to mother of 20.47 million yuan, an increase of 168.31% over the previous year. Operating income increased slightly during the reporting period, and net profit rose sharply. The company had accounts receivable of 770 million yuan, an increase of 48.67% over the same period last year. The weighted average ROE was 0.91%, gross profit margin 17.51%, and net profit margin 2.57%. The company's performance is greatly affected by the military delivery cycle. Military products have the characteristic of centrally confirming revenue in the fourth quarter, and they are optimistic about annual performance growth. China's weapons and equipment are being replaced. The prospects for demand for optoelectronic guidance equipment are clear. China is in a period of upgrading its main combat equipment. Demand for guided munitions is quite strong, and the Army's demand for guided artillery shells, anti-tank missiles, and guided rockets has increased dramatically. The Nineteenth National Congress Report proposed that significant progress will be made in the mechanization and informatization construction of the entire army in 2020. The mechanization mentioned here mainly refers to the transformation of combat vehicles, and the company's assembly product business will benefit from the mechanized construction of the entire army. With the implementation of the pricing mechanism reform, state-owned military enterprises have released their performance, and with the beginning of reforms after the end of the 19th National Congress, the military pricing mechanism reform is expected to begin to be implemented. This helps state-owned military enterprises break free from the constraints of the cost bonus system and release more performance. Under the cost bonus system, corporate performance can be unleashed, and the net profit level of assembly products cannot exceed 5%. The new pricing mechanism uses market-based pricing, and the final assembly product business profit, which accounts for a high percentage of the company's revenue, is expected to be released. Risk warning: The company's performance growth rate may fall short of expectations, and the asset securitization progress of relevant units may fall short of expectations.