Key investment points: Electric pump products have begun to be released, bicycle supporting value enhancement. The company has taken the lead in developing electric pump products in recent years based on the technical accumulation of hydraulic pumps, and has successfully applied them to various automobile modules, which are expected to fully benefit from the trend of electrification, hybridization and intelligence of automobiles. Electric pumps use electric drives to change the mode where the engine drives the mechanical pump in traditional cars. After applying an electric pump, traditional cars can effectively reduce the burden on the engine and achieve fuel saving effects. Various types of hybrid vehicles can continue to work while the engine is intermittently turned off, and the use of electric pumps in electric vehicles is an inevitable choice. The company has now developed transmission electronic pumps and hybrid box electronic pumps in the transmission system, electrohydraulic steering pumps and EPS brushless DC motors in the steering system, electronic vacuum pumps in the braking system, and chassis control electric pumps in smart car systems, etc., and has successfully entered companies such as Chrysler, SAIC Motor Autonomous, SAIC-GM-Wuling, BAIC Group, Zotye Automobile, and Shengrui Transmission. It is estimated that the 2018 revenue contribution of electric pump products will be around 400 million yuan. The multi-scenario application has increased the value of the company's bicycles from 200 yuan to 1,000 yuan to 2,000 yuan. At the same time, it has also effectively strengthened the stickiness with customers and occupied the technological supremacy of next-generation automobiles. New mechanical pump products have opened up the market, and revenue from old products has stabilized and surpassed market expectations. The company's mechanical pump products have opened up the automatic transmission oil pump market, fully benefiting from the process of localizing automatic transmissions. They are already a core supplier of own-brand transmissions, and have an opportunity to break through joint venture transmission manufacturers in the future. At present, automatic transmission manufacturers such as SAIC Gear, Jisheng Transmission, Hunan Rongda, Dongan Power, and Shengrui Transmission are all company customers and have been indirectly supplying automobile companies such as SAIC Motor Group, Geely Automobile, Jiangling Motor, Xiaokang Automobile, Zotye Automobile, etc. Classic models include Roewe RX5, Geely Boyue, Zotye T600, etc., and it is estimated that automatic transmission oil pump revenue will contribute more than 200 million yuan in 2018. The company's traditional hydraulic steering pump has been pressured by EPS replacement in the passenger car field in recent years, but the hydraulic steering pump in the commercial vehicle field is still the most reliable and economical choice in recent years. Furthermore, the rapid exit of competitors such as Bosch and ZF has created favorable conditions for the company to expand its domestic and international front-loading and rear-loading market share. According to estimates, the domestic HPS market space is still around 2 billion, and the company's market share has stabilized at 30%. According to the company's 2017 performance forecast, the revenue of the old product traditional hydraulic steering pump has stabilized, which is better than market expectations. Carcus, the world leader in NVH silent systems, consumer upgrades drive car comfort configurations. CCI (CCI) is the world's top solution provider for sound insulation and noise reduction systems. Its main customers are Mercedes-Benz, BMW, Audi, Volkswagen, and Ford. The models offered are all luxury cars, and its technical strength can be seen. The global consumption upgrade has brought about an increase in luxury car sales, creating a favorable environment for Carquus's revenue growth and stable gross margin. According to the company's performance forecast, we estimate that in 2017, Carcus achieved a net profit of about 17 million euros, which was significantly higher than the performance promise of 103 million yuan, which also matched the equity acquisition cost of 1 billion yuan after deducting debt. The stability of Carquus's profit has dispelled market concerns that its profit inflection point will not be reached, and in turn, it will become a stabilizer of the company's performance in the future. At the same time, the company plans to introduce Carqueus' high-end sound insulation and noise reduction technology into the country to help its own-brand models improve the quality of sound insulation and noise reduction on the basis of weight reduction. The year 2017 was when cost pressure was greatest, and the 2018 performance inflection point was imminent. According to the company's performance forecast, net profit is expected to reach 132-149 million yuan in 2017, an increase of 20-36% over the previous year. Based on the median calculation, the net profit for the fourth quarter was 49 million yuan, up 75% from the third quarter of 28 million, and 130% from the fourth quarter of 2016. This is the highest quarterly profit since the company went public. The company's fund-raising for new products such as electric pumps, automatic transmission oil pumps, and automotive electronics businesses began to gradually contribute revenue and economic benefits, and the acquisition of Germany's Carcus (CCI) to achieve financial consolidation, so the company's performance began to improve. The large financial and commission fees and equity incentive expenses of the acquisition of CCI (CCI) in 2017 affected net profit of nearly 100 million yuan. Convertible bond financing and increased operating cash flow in 2018 will ease the pressure on financial expenses. Comparing financial changes between 2017 and 2018: From 2016 to the first three quarters of 2017, new products have not yet formed a mass supply, while old products have rapidly shrunk, compounded by higher financial costs, and the company's performance indicators are under pressure. In the fourth quarter of 2017, with the gradual release of orders for new products, the company's performance has increased markedly. Shipments in 2018 have further increased, the company's financial indicators will improve overall, and the trend will continue for several years. Profit forecast and investment rating: We estimate the company's net profit for 2017/2018/2019 to be 1.40/270/363 million yuan, respectively. The current market value of 4.1 billion dollars, corresponding to PE is 29/15/11 times, respectively. We estimate that the year-on-year growth rate of the company's performance in 2018 will exceed 90%. If further consideration is given to subsequent product line extensions, the supply of various products enters a mature stage, and when the performance growth rate tends to plateau, a 15-fold valuation is given. The corresponding long-term market capitalization space exceeds 20 billion yuan, maintaining a “buy” rating. Risk warning: risk of new product expansion falling short of expectations; risk of automobile market sales falling short of expectations; risk of acquisition target performance falling short of expectations; risk of fund-raising project construction falling short of expectations.