1. Yueda Investment's most important performance contribution source Dongfeng Yueda Kia's sales fell sharply in the first three quarters affected by the THAAD incident, but sales began to improve in October. K3 and KXcross sales reached 1.5 and 6000 units respectively in that month, driving Yueda Kia's overall monthly sales of 43000 units, which continued to recover after sales exceeded 40,000 in September.

2. Although sales have recovered, K3 and KXcross are low gross margin products in Yueda Kia's product line, and due to poor sales in the first three quarters, it is expected that these two models will give relatively large subsidies to dealers, so it remains to be seen whether Yueda Kia's fourth-quarter results can rebound as scheduled.

3. In the medium and long term, the selling point of Yueda Kia's overall products is not prominent. In the past, the strategy of focusing on performance-to-price ratio and beautiful appearance has slightly lagged behind with the great development of independent brands in the past two years. In the future, Yueda Kia plans to reverse the decline by introducing more local models and new energy models: next year, the new generation of smart running, two SUV models of KX1 and a hybrid version of the new energy model K5 will be introduced to the market, which is expected to boost sales.

4, other business aspects: 1) the performance of the two expressways is relatively stable, the traffic volume of the Beijing-Shanghai Expressway has increased slightly more than expected this year, and the West Copper Expressway has declined under the influence of the closure of toll stations; 2) the textile business continues to lose money. In the future, we hope to gradually reverse losses through the development of our own brand; 3) Yueda Maheng's tractor business is actively developing new products with high horsepower to reverse the decline in sales.

5. We estimate that the return net profit of Yueda Investment in 2017 and 2018 will be-350,200 million yuan, and the dynamic valuation in 2018 will be 27 times.

6, risk tips: 1, a sharp decline in sales in the automobile market; 2, a sharp increase in the cost of raw materials