Event: On March 23, 2017, the company released its 2017 annual report. In 2017, the company achieved operating income of 726 million yuan, an increase of 119.00% over the previous year, and realized net profit of 173 million yuan, an increase of 173.27% over the previous year. Investment points: The full-year performance of 2017 increased significantly, and the company with the biggest increase in the fourth quarter achieved operating income of 726 million yuan in 2017, an increase of 119.00% over the previous year, and realized net profit of 173 million yuan, an increase of 173.27% over the previous year. Among them, it achieved operating income of 308 million yuan in the fourth quarter, accounting for 42.41%; net profit of 87 million yuan, accounting for 49.93%; and year-on-year increases of 176.73% and 235.08%, respectively. It can be seen that the company's performance increased significantly in the fourth quarter. In terms of profitability, the company's gross margin for the full year of 2017 was 41.45%, an increase of 5.63 percentage points over the full year of 2016; the net profit margin for the full year of 2017 was 23.87%, an increase of 4.74 percentage points over the full year of 2016, and the growth rate of high-margin products increased, accounting for the increase in the company's main products, including ultra-fine electronic wire and diamond cutting wire. Ultrafine electronic wires specifically include conductors, laminated wires, and wireless sensing coils formed by further processing of laminated wires. These products are widely used in consumer electronics, new energy vehicles, intelligent robots, and medical devices; diamond cutting lines are mainly used in the fields of cutting hard and brittle materials in the solar photovoltaic and sapphire industries. Among these products, the diamond cutting line had the highest gross margin, at 56.21%, and achieved annual revenue of 356 million yuan, an increase of 317.42% over the previous year. It is the product with the biggest growth rate. Its share of total revenue also increased from 25.9% in 2016 to 49.19%, making it the product with the highest share. The main reason is that all fund-raising projects (annual output of 2 million km of diamond cutting line projects) have been completed, improving the company's product structure. The wireless sensor coil products of companies that have long been optimistic about wireless induction coils and battery pole ear business are the company's supporting R&D and production of smart watch wireless chargers for Apple and other companies. The main supplier of this type of product was the main supplier of this type of product. In 2017, the revenue of this product increased 238.78% year on year. Since wireless charging is in the penetration period, I am optimistic about the future market space of the company's product. In 2017, battery pole ear products were added to the company's products, which are mainly used in power lithium-ion polymer batteries for pure electric vehicles and hybrid vehicles. With the rise of the NEV industry, the market demand for battery pole products will expand accordingly. Currently, major customers include Weihong Power, Wanxiang A123, and Tianjin Jiewei. Therefore, we are optimistic about the future growth prospects of the company's products. Profit forecasts and investment recommendations predict that the company's EPS for 2018 and 2019 will be 2.64 yuan and 3.92 yuan respectively, and PE corresponding to the closing price of 109.09 yuan on March 22, 2018 will be 41.35 times and 27.86 times, respectively, giving it an “increase in holdings” rating. Risk factors Risk of declining gross margin of diamond cutting lines; risk of new product promotion falling short of expectations