The peak of delivery carry-over is approaching, and there is a marked improvement in financial indicators, which is expected to achieve steady growth. The company's main product customers are mainly the domestic military. Order delivery carry-over is clearly cyclical, and delivery carry-over is often the peak of delivery carry-over at the end of the year. Since the company received a large number of aero-engine electronic contract orders in 2017, the company's orders were delivered to customers as scheduled and accepted according to the delivery schedule. As a result, the third quarter performance improved, net profit of 5.99 million yuan, an increase of 77.12% over the previous year, gross margin in the third quarter increased 4.05% year on year, operating profit margin increased 8.24% year on year, and the three cost rates fell 2.82% year on year. Financial indicators improved markedly, showing gradual stabilization. As the peak of order delivery and carry-over at the end of the year approaches, the company's annual performance is expected to achieve steady growth. The market potential for inertial navigation systems is huge and continues to be an important driving force for profit. The company's aviation inertial navigation products are mainly integrated navigation products that integrate information from multiple systems such as satellite navigation systems and Doppler navigation systems, etc. with inertial navigation technology as the core. Since inertial navigation is currently the only navigation method that is both autonomous navigation and can provide complete dynamic information, inertial navigation is an important and irreplaceable navigation method in the field of air navigation. All navigation systems in the fields of aerospace, aviation, navigation, and military have a continuous demand for inertial navigation systems. The company's main business revenue mainly comes from aviation inertial navigation products, aero engine electronic products and related professional technical services. Among them, inertial navigation systems accounted for 69.19% of the company's main business revenue in 2016, and gross margin was 47.98%, which is the main component of the company's profit. Aviation electronics products and drones are expected to become future profit growth points. The application of electronic engine control system technology in China is still in its infancy, and it is one of the key aviation technologies in need of breakthroughs in China. The engine electronic control system independently developed by the company on the basis of existing engine parameter collectors and flight control computer technology has completed project acceptance in the pre-research stage, and has achieved revenue from professional technical services. As an unmanned target aircraft, the company's first-generation drone has successfully entered the military target aircraft market. The company will further integrate the company's technical advantages in the fields of navigation, flight control and engine electronics to develop highly intelligent, expandable and multi-functional drone systems. This will greatly expand the company's market area. Aviation electronics products and drones may become important profit growth points for the company in the future. Profit forecast and investment rating: Net profit for 2017-2019 is expected to be 53 million, 60 million and 68 million yuan, EPS of 0.59 yuan, 0.67 yuan and 0.76 yuan, corresponding PE of 67 times, 59 times and 52 times. For the first time, coverage was given a “buy” rating. Risk warning: delivery carry-over cycle; risk of fluctuations in revenue, costs and performance due to differences in price and final approved price; risk of high customer concentration