Non-net profit increased by 44% in the first three quarters, in line with expectations that Fuda Co., Ltd. achieved operating income of 969 million yuan from January to September 2017, an increase of 35.38% over the previous year; net profit of 106 million yuan, an increase of 80.13% over the previous year (net profit after deduction of 59 million yuan, up 44.29% year on year). Looking at the split reporting period, Q3 achieved revenue of 285 million yuan, an increase of 38% over the previous year, and continued to grow. The company's fee control is beginning to show results. From January to September 2017, the company's third rate was 16%, down 4pct from the previous year. Product structure optimization, customer structure optimization, and cost control level improvement, multiple factors guarantee rapid performance growth. Product structure optimization, clutch unit price increases, pull-type diaphragm spring clutches, which dominate the medium and heavy commercial vehicle sector under the trend of import substitution, have a lot of room for development. The unit price of pull clutches is more than double that of push clutches. As one of the few domestic enterprises with pull clutch product research and development capabilities, Fuda has increased its share of pull clutch product sales in recent years, product structure upgrades, and average clutch business prices have increased year by year (442 yuan/set in 2014, 503 yuan/set in 2016), contributing to clutch business profits. The recovery of heavy trucks boosted demand, and the expansion of crankshaft production capacity to ensure supply benefited from the recovery in engineering infrastructure investment and continued growth in heavy trucks in 2017. The company's main customers, Guangxi Yuchai and Dongfeng Cummins, increased their diesel engine sales in the first three quarters by 80% and 28%, respectively. The sales volume of traditional customers has increased rapidly, leading to an increase in the performance of Fuda Co., Ltd. The company's fixed increase projects in 2015 (with the exception of the termination of the Xiangyang project) progressed normally in the first half of 2017, which will reduce the current situation of insufficient crankshaft production capacity to a large extent. Optimize the customer structure and expand the share of passenger car customers The company continues to expand the share of passenger car crankshaft products on the basis of refining and strengthening commercial vehicle crankshaft products. In 2016, the company successfully obtained the qualification for targeted development of crankshaft blanks from Volvo and Mercedes-Benz and entered its supply system. It also became a supplier of crankshaft blanks for Dongfeng Renault in October 2017, and agreed to supply 100 million yuan of crankshaft blank products by 2023. By entering the supply systems of major passenger car manufacturers, the company has improved the customer structure, reduced the risks brought about by a single customer structure, and increased product market space. Product upgrade+capacity expansion+commercial transfer gave Fuda Stock a rating of increased holdings. Fuda Co., Ltd. is a high-quality Tier 2 for automotive power system components. It has benefited in the short term from sales growth and rate improvements for downstream customers (Yuchai, Cummins) brought about by the heavy truck market, and is optimistic about the company's clutch product upgrades, crankshaft production capacity expansion, and passenger car customer expansion in the long term. We predicted that the EPS for 17/18/19 would be 0.27/0.30/0.36 yuan, and the corresponding PE would be 39.4/34.6/29.3 times, covering the first time, and giving it an increase in holdings rating.