Abstract: During the “12th Five-Year Plan” period, China's defense spending increased at a compound annual rate of more than 10%. It is estimated that in 2016-2020, the compound annual growth rate of China's defense spending will be between 5% and 10%. As an important component of weapons and equipment systems, navigation systems will directly benefit from the modernization process of the Army, Navy, and Air Force. Market demand comes from new conventional weapon kits and the replacement of old equipment. During the “13th Five-Year Plan” period, the average annual growth rate of China's military navigation industry is expected to be higher than the growth rate of national defense spending. In the field of military aircraft, China will need 3,000 fixed-wing aircraft and 2,000 helicopters of all kinds in the next 10 years, and the navigation products market is about 12 billion US dollars. In the field of civil aviation, with the gradual advancement of domestic civil aviation product development and test flight certification, and the good development of the low-altitude airspace management system reform, commercial demand for helicopters and small aircraft will increase markedly, leading to greater market demand for navigation control products. In the field of inertial navigation, particularly in aviation, there are few participants with strong development and production capabilities. The company's aviation inertial navigation products mainly focus on inertial navigation technology. The products are mainly used in the aviation field, and the products are all military products. The company's overall R&D investment is on the rise, and its scientific research results are outstanding. In 2014, the subsidiary Nanjing Chenxi won the first prize from the General Staff. Profit forecast: It is predicted that the company's revenue in 2017-2019 will increase by -12.6%, 10% and 15% respectively. Net profit will reach 48 million yuan, 55 million yuan and 64 million yuan respectively, and EPS will be 0.54 yuan, 0.61 yuan and 0.71 yuan. Combined with the company's current stock price, the company is rated “increased holdings”. Risk warning: 1) The risk that the equipment update and replacement progress is lower than expected; 2) the risk that demand for the company's main products is lower than expected.