Investment highlights: Event: Tony released its 2017 annual report, with annual revenue of 726 million yuan, an increase of 119% over the previous year, net profit of 173 million, an increase of 173% over the previous year, and a net profit of 165 million yuan, an increase of 192% over the previous year. Total assets at the end of the year were 1.24 billion yuan, an increase of 162% over the previous year. Old products benefit from process upgrades, and diamond wires benefit from increased production capacity. The main products at this stage: 1) Ultrafine electronic wires (including conductors, laminated wires, and wireless sensing coils), which are widely used in consumer electronics, new energy vehicles, intelligent robots, and medical devices 2) Diamond cutting lines are mainly used in the field of cutting hard and brittle materials in the solar photovoltaic and sapphire industries. In 2017, the revenue of conductor products was 260 million yuan, 27% over the same period; the revenue of laminated wire was 500 million, 69% over the same period; and the revenue of wireless sensing coils was 0.2 billion, 239% over the same period. The above product growth was due to “material upgrades and the launch of new products, driving an increase in volume, while the share of existing customers also increased”. In the field of new products, Tony Electronics' 2 million km diamond wire fundraising project reached production at the end of November 2017, with annual revenue of 356 million yuan, an increase of 317% over the previous year. The main growth force was switched from conductors to diamond cutting lines, and the company's overall gross profit margin and net profit margin increased dramatically. In 2016, the conductor business accounted for 63% of revenue; in 2017, the share of gold diamond wire business volume revenue rose to 49%, and gross margin increased from 47% to 56%. Tony's consolidated gross margin increased from 35.7% in 2016 to 41.5% in 2017, and net profit margin increased from 19.1% to 23.9%. In 2017, the gross margin levels of the company's main products, diamond wire, ultra-fine conductors, laminated wire, and wireless induction coils were 56%, 22%, 51%, and 49%, respectively, so diamond wire drove both revenue and profit margin growth. Asset growth and equipment transformation drive a new round of diamond wire business growth. Total assets at the end of 2017 were 1.24 billion yuan, an increase of 162% over the previous year. Net assets attributable to shareholders of listed companies were 730 million yuan, an increase of 189% over the previous year. The company's fixed asset turnover ratio at the end of 2017 was 2.7, a significant decline compared to 3.3 in 2016, mainly due to the 4Q time point for the new plant to be put into operation. Compared with the 2016/2017 business cycle and working capital turnover ratio, the company's operating capacity has improved to a certain extent. At present, the first phase of the plant in the new factory area has been put into operation. The second phase of the plant is expected to be completed by the end of 18, and another 140 acres of land for the new plant were won in early 2018. Based on the company's current operating capacity, the new assets added in 2017 lay the foundation for revenue and profit growth in the following years. The company has upgraded its own equipment and expanded production. Currently, the annual production capacity is about 8 million KM. The volume of the 18-year steel cable release is expected to drive a sharp increase in the company's performance. Raise the profit forecast and maintain the “buy” rating. The company uses the wire drawing process as a starting point, gradually expanding the variety of product lines and expanding process reserves. The company is expanding into high-value-added products such as new energy vehicle wires, medical cables, and battery poles based on world-leading consumer electronics wire technology, which is expected to break the monopoly position of international manufacturers in these fields. In 2017, revenue of 730 million yuan and net profit of 173 million yuan were slightly higher than predicted values (original forecast revenue of 640 million, net profit of 170 million yuan). Since the progress of the business of King Kong Wire and Battery Company exceeded expectations, the 2018/19 revenue forecast was raised from 1,27/1.66 billion to 13.1/1.84 billion, net profit was raised from 36/4.7 million to 38/53 million, and the revenue forecast for 2020 was increased by 2.14 billion, and net profit was estimated at 630 million yuan. We are optimistic about the company's ability to deliver on its performance over time and maintain the buying rating.