Key investment points: Demand for downstream 3D printing and electronic machines is strengthening, and the volume of industrial printing equipment is being released. In April 2017, the country issued the “Development Plan for the “13th Five-Year Plan for the Printing Industry”, which indicated that by the end of the “13th Five-Year Plan” period, the total output value of the printing industry exceeded 1.4 trillion yuan, ranking among the highest in the world; it supports the integrated development of printing methods such as offset printing, screen printing, and flexographic printing with digital technology, and promotes the development of other strategic emerging printing industries such as printed electronics, 3D printing, and photonic crystal preparation. Currently, downstream 3D printing, electronics and other industries are in strong demand. Woglers Associates announced that the global 3D printing output value in 2016 reached 6.063 billion yuan, an increase of 17.40% over the previous year; the National Bureau of Statistics announced that the total output of electronic computer machines from January to October 2017 was 294 million units, an increase of 7.50% over the previous year. Driven by policy and market, the boom in industrialized printing equipment has risen this year; the Zhongguancun Electronics Index Network announced that the monthly laser printer sentiment index for November 2017 was 1108.83, up 2.50% year on year, and the monthly inkjet printer sentiment index was 1058.56, up 1.99% year on year. We believe that under policy guidance and market driving, the company's performance is expected to experience rapid growth. The company's products are highly profitable, and the price advantage is obvious. In the first three quarters of 2017, the company achieved operating income of 136 million yuan, a year-on-year decrease of 1.43%; realized net profit of 29.012,400 yuan, a year-on-year decrease of 10.40%; mainly due to the current decline in the US dollar exchange rate, the company's financial expenses increased by 283.00%. In the first three quarters of 2017, the gross sales margin of the company's products was 50.35%, and the net sales margin was 21.40%. It can be seen that the profitability of the company's products was strong. Currently, the company's leading products are computer direct plate making machines (CTP), which include offset CTP and flexographic CTP. In the first half of 2107, it achieved sales revenue of 79.088 million yuan, accounting for 94.57% of revenue, and gross margin of 49.92%. At the same time, the price of the company's offset CTP products is generally 20%-40% lower than the price of similar products from major international competitors. The price of flexographic CTP products is generally 30%-50% lower than the price of similar products from major international competitors, and the price advantage is obvious. The company has invested heavily in R&D, and industrial inkjet printheads are ready to enter large-scale production. Since 2015, the company's R&D investment has increased steadily at a growth rate of around 7%, accounting for a continuous increase in revenue; R&D investment in the first half of 2017 was 934 million yuan, up 6.08% year on year, accounting for 11.17% of revenue. The company's key product is an industrial inkjet printer head. It has completed small-scale trial production in the laboratory, and has received a good response from trials at overseas customers. At present, the company's industrial inkjet print head products have entered the preparation and planning stage for large-scale production, and it is expected that small-batch production will be achieved in the second half of 2017. We are optimistic about the amount of revenue it will bring in in the future after the company's industrial inkjet printer heads are officially mass-produced. For the first time, coverage was given a “neutral” rating. The company's net profit for 2017-2019 is estimated to be 40 million yuan, 0.48 million yuan, and 0.58 million yuan respectively. The corresponding EPS is 0.28 yuan/share, 0.33 yuan/share, and 0.40 yuan/share. Based on the latest closing price of 15.90 yuan, the corresponding PE is 57, 48, and 40 times, respectively. Since there is still uncertainty about the mass production progress of the company's new inkjet printer head, it was given a “neutral” rating. Risk warning: risk of downstream industrial printing industry policy support policies not meeting expectations; risk of downstream industrial printing market demand falling short of expectations; risk of order acceptance not meeting expectations; risk of mass production of R&D products not meeting expectations.