The agricultural machinery business declined year by year. The core military business was established. After acquiring Tomorrow's Aerospace in 2015, the company established military industry as its core business, while retaining the original agricultural machinery business, forming two major business segments: military industry and agricultural machinery. Currently, the agricultural machinery market is sluggish. The company's agricultural machinery business has declined year by year and has already lost money, and the military business is contributing the main profit. The company's revenue in 2017 ($1.85 billion, +3.5%), net profit to mother ($40 billion, +60.1%). Aerospace manufacturing: Leading domestic technology and scale. Developing aerospace manufacturing at a compound growth rate of 65.2% is an asset-heavy industry, and military products require high confidentiality. Although Aerospace is a private enterprise tomorrow, due to its leading edge in technology and scale, it has rapidly grown into one of the largest and most powerful companies in China. Over the past five years, it has grown at a compound growth rate of 65.2%. We believe that the company's aviation business has benefited from the acceleration of military aircraft replacement and deployment, and the aerospace business has benefited from the increase in consumables brought about by the military's actual combat training. At the same time, in the context of the country promoting the development of civil-military integration and establishing a “small core, big collaboration” defense industry system, the company continues to undertake more research tasks to drive the company's aerospace and military business to continue to grow rapidly. International aviation subcontracting: Military to civilian expansion into new fields, once again opening up the growth ceiling. Tomorrow, Aerospace will use the technical advantages accumulated in defense products to actively expand the international aviation subcontracting business, and has made substantial progress. We expect that starting in 2018, the company's international aviation subcontracting business will gradually be implemented, but the subcontract business generally takes two to three years from quotation, first item development, small-batch trial production, and formal batch order confirmation. Early production line construction and process tooling preparation require a large amount of capital investment, and the equipment temporary load rate is low during this period, current costs will rise, and there is a risk that profit implementation will lag behind. The aviation international subcontracting market is huge. After the company enters a new field, the growth ceiling is further opened, and it is expected that 2019 will begin to release performance. Investment advice: The company is an outstanding representative in the context of the country's civil-military integration. It has deep technical accumulation and rich experience in joining the military. In the field of aerospace manufacturing, it has become a leading domestic enterprise in scale and strength, and will continue to benefit from the booming development of the aerospace industry. Based on the present, the company focuses on the long term, and relies on military technology transformation to enter the aviation international subcontracting business, greatly expanding the future development space. It is estimated that from 2017 to 2019, the company's net profit will be 40 million, 620 million, and 9.3 billion, respectively, equivalent to 34, 22, and 15 PE, with a buy-A investment rating, and a target price of 13.4 yuan for 6 months. Risk warning: The development of the aerospace industry falls short of expectations; the progress of international subcontract expansion falls short of expectations; the agricultural machinery business continues to lose money.