For the first time, investment highlights covered Fenda Technology Company (002681), which gave a recommendation rating. The target price is 15.50 yuan, corresponding to 25 times the valuation in 2018. Fenda Technology is a vertically integrated manufacturer and service provider of consumer electronics. It acquired Fuchengda, an Apple metal parts supplier, this year to enter the Apple industry chain. The smart speaker business is also widely recognized, benefiting from the explosion in the smart speaker market. The reasons for the recommendation are as follows: Acquire Fuchengda and enter the Apple industry chain: The company merged with Fuchengda this year. Fuchengda is an Apple metal small parts supplier. 80% of revenue comes from Apple. This year, it benefited from iPhone 8/8+/X innovation. Orders from Apple have doubled, leading to high performance growth. However, at present, Fuchengda is only ranked fifth in the Apple system. Most of the top few are overseas companies. Fuchengda has advantages in stamping quality, coordination, cost, etc., and will use Fenda Technology's platform and resources to solve capital, production capacity, and surface treatment bottlenecks, and gain more product numbers and shares in the Apple system. Fuchengda+Opunda boosts the metal parts market: Opunda within Funda is also a supplier of metal exterior parts. It has strong complementarity with Fuchengda in terms of processes and customers. The integration of Fuchengda and Opunda will form a one-stop supply capacity for the entire metal parts process and small and large parts, opening up more space for Apple, Huawei, Vivo and other brand customers and automotive electronics, smart wearables, health care and other markets. The core suppliers of smart speakers from Tmall and JD have followed the rapid growth of smart speakers: Fenda Technology is a leading speaker manufacturer in China. It has cooperated with top customers such as Bose and Harman for many years. This year, it has also become the main supplier of Tmall Genie and JD Dingdong 2. Tmall Genie has become a double 11 hit this year, driving the explosion of the domestic smart speaker market, and the company will continue to benefit in the future. What is our biggest difference from the market? Fuchengda still has a lot of room for improvement in the Apple system; Fenda Technology's smart speaker business is underestimated. Potential catalysts: Apple's new machine innovation, Tmall and other customers launch new smart speakers. Profit Forecast and Valuation We expect the company's EPS for 17-19 to be $0.35, $0.62, and $0.83, respectively, and a CAGR of 44%. The current stock price of the company corresponds to 18 times the 18-year P/E. According to the segmented valuation method, we gave a target price of 15.5 yuan, corresponding to the overall valuation of 2018 25 times, and gave a recommended rating. The development of risk smart speakers fell short of expectations, and the acquisition of Fuchengda and Opunda fell short of expectations.