Profit is predicted to increase 21.0% year on year, and Fenda Technology announced its 2017 performance report. Revenue for 2017 was 3.25 billion yuan, up 54.6% year on year, and net profit was 466 million yuan, up 21.0%. It is at the lower limit of 20-50% of the previous forecast, slightly lower than expected. The performance is at the lower end of the forecast mainly because the 4Q17 performance of Apple's new and domestic models fell short of expectations, affecting Fender's Fuchengda and Oponda. At the same time, the company's speaker and health appliances business was greatly affected by price increases of upstream raw materials. Prices of raw materials such as packaging materials and NdFeB all increased by 100% last year, and prices for other components such as plastics and capacitors also increased. Key points of focus: Fuchengda's off-season is not easy, and ASP is expected to continue to rise in the second half of the year: the company acquired Fuchengda into the Apple metal parts supply system. Last year, Fuchengda raised the ASP for new Apple devices from around 2 US dollars to 6-7 US dollars. With sales of new Apple machines falling short of expectations, Fushengda's business conditions in the first quarter of this year are still quite optimistic. Currently, production capacity is also tight. The Q2 Qingxi Industrial Park will be put into use to resolve production capacity bottlenecks. Looking ahead to the second half of this year, although Apple's innovation in new models is not strong, we believe that the company will have an opportunity to obtain more material numbers from Apple, and ASP is expected to increase by more than 30% again. The smart speaker market continues to heat up, and Fenda continues to benefit: Fenda Technology is the main manufacturer of smart speakers such as Tmall Genie X1 and JD Dingdong 2. Last year, it contributed more than 200 million yuan in revenue, mainly focusing on large-scale shipments in October-November. This year, the company has also entered the next generation of Tmall Genie products, and there is an opportunity to continue to increase its share and even supply exclusive products. This year, led by Apple and others, the smart speaker market is expected to continue to heat up, and Fenda will continue to benefit. In addition, the company's orders for products such as traditional speakers and health appliances are also high, and production capacity is already scheduled for May-June. Valuation and recommendations Due to continued sluggish mobile phone shipment expectations, we lowered our profit forecast for 17/18/19 by 11%/7%/3% to 4.7/8.6/1.17 billion. The target price was lowered by 6.5% to 14.5 yuan, which still corresponds to the 18-year 25 times valuation. The recommended rating. The development of risk smart speakers fell short of expectations, and the acquisition of Fuchengda and the integration of Opunda fell short of expectations.