Revenue maintained high growth in the first three quarters, and profitability continued to improve.

The company announced that in the third quarter of 2017, the operating income in the first three quarters of 2017 was 168 million yuan, an increase of 63.37% over the same period last year. The net profit returned to the home was 6.1076 million yuan, an increase of 24.48% over the same period last year, and the net profit after deduction was 25.23%. Basic earnings per share were 0.06 yuan, the same as the same period last year.

In the third quarter, the company realized net profit of 2.0774 million yuan, an increase of 8.23% over the same period last year; operating income of 41.7987 million yuan, an increase of 14.66% over the same period last year; and basic earnings per share of 0.02 yuan, the same as the same period last year. In the first three quarters of the company, the company's comprehensive gross profit margin was 31.62%, slightly higher than the report of 30.76%. To sum up, the company's third-quarter results are in line with our expectations.

The main business bottomed out and rebounded, optimistic about the high growth of the company's annual performance.

The company is a leading provider of industrial intelligent conveying batching system in China. In recent years, due to the impact of the industry recession, the performance has declined significantly, but the company still occupies a leading position in the industry by virtue of technology and channel advantages.

As the industry rebounded this year, the company's revenue side grew sharply, with revenue up 63.37% in the first three quarters compared with the same period last year.

The company laid out its environmental protection business in time after the pressure on its performance in 2015. with the gradual realization of the company's environmental protection business performance, we expect the company's revenue from this business to exceed 100 million yuan in 2017. The company's full-year net profit is expected to grow by more than 30%.

The merger and acquisition of Clearing Investment Intelligence has been continuously promoted and has been conditionally approved by the Securities Regulatory Commission.

On June 9, the company announced that it planned to buy 97.01% of CCT shares from 13 shareholders, including Wang Zhan, by issuing shares and paying cash, with a transaction amount of 771 million yuan. The plan was conditionally approved by the Securities and Futures Commission on September 20. Qing Investment Intelligence to the Internet of things large screen splicing system and intelligent control system, intelligent equipment as the main business. Intelligent screen display control can be used for monitoring, command and scheduling, conference center and other scenarios; intelligent equipment includes smart gun wardrobe, intelligent robot, intelligent ski machine and secret cabinet and so on. Clearing Investment Intelligence has revenue of 242 million yuan in 2016, and the statement is expected to at least double the company's revenue. On the other hand, it is also expected to integrate with the company's original business. Wang Zhan, the original shareholder, created the world promise that the 18-year net profit of Clearing Smart in 2017 was 55 million yuan / 70 million yuan respectively, with a cumulative total of not less than 215 million yuan in 17-19 years.

The main business is picking up, mergers and acquisitions are moving forward steadily, and the "buy" rating is maintained.

In the first three quarters of 2017, the company realized operating income of 168 million yuan, an increase of 63.37% over the same period last year, and a net profit of 6.1076 million yuan, an increase of 24.48% over the same period last year. With the recovery of the industry, the main industry is expected to bottom out and rebound, and the company's annual net profit growth is expected to be more than 30%. The company's M & A clear investment intelligence program has been conditionally passed, and has replied to the audit opinions, we believe that the probability that the program can be implemented is very high. Assuming that the acquisition can be completed in January 2018 and the table, it is expected that the fully diluted EPS in 2017-19 will be 0.18 / 0.74 PE 0.90 yuan; the reasonable price range is 30.3-35.5 yuan, corresponding to 18 years 41-48 times PE, maintaining the "buy" rating.

Risk hints: macroeconomic fluctuation risk; M & A failure risk; post-M & An integration is less than expected risk.