According to the report, the company announced its 2017 annual report. Operating income increased 63.72% year-on-year to 914 million yuan, achieving net profit of 16.8832 million yuan, turning a loss into a profit, and getting the main business back on track. Key investment points: Production increased and gross margin increased. The company's operations are back on track. The company's main product, special cable production and sales volume in 2017 reached 430 million km and 428 million km respectively, with year-on-year increases of 61% and 56%, respectively, over last year, significantly exceeding the average growth rate of the industry, showing a strong recovery trend. Affected by the increase in the price of the raw material copper, the gross margin level of the industry has been compressed to a certain extent. Under the circumstances where the growth rate of industry demand did not increase significantly and the price of raw materials was unfavorable, the gross margin levels of the company's products, special cables and ordinary cables, increased by 1.72 and 2.56 percentage points to 16.6% and 15.44%, respectively, indicating that the company's operations are on the right track and have sufficient capacity to cope with changes in the industry through various means such as optimizing the product structure. The overseas and new energy business was impressive. During the reporting period, the company stepped up its market development efforts in various fields. Among them, the overseas market revenue exceeded 120 million yuan, up 46% year on year; the nuclear power and new energy market grew 385.62% year on year. Batch supply was carried out to the Yangjiang Nuclear Power Plant 56 project, the Hongyanhe nuclear power plant project, and the Taishan nuclear power plant project. PV cable orders increased dramatically, and wind power orders remained stable. We believe that with the gradual increase in the influence of China's “Belt and Road” initiative overseas, the company is expected to continue to make breakthroughs in overseas business expansion. In addition, in 2017, the company carried out development and trial production of DC traction power cables for rail transit and high-voltage wiring harnesses for electric vehicles, and won bids for the Xi'an North Airport Intercity Rail Project of the China Railway Electrification Administration and the Xi'an Metro Line 4 project of the Fifth Bureau of China Railway in March 2018. We believe that the rail transit sector is expected to become another major growth pole for the company, boosting the company's continuous business development. Investment recommendations We expect net profit from 2018 to 2020 to be 4731, 8467, and 122.47 million yuan respectively. EPS corresponding to the current share capital is 0.09, 0.16, and 0.24 yuan/share, with year-on-year increases of 180.28%, 78.96% and 44.63%, respectively. Currently, P/B is 2.1 times. Maintain the company's “increased holdings” rating based on comprehensive considerations. Risk warning: New business expansion or unmet expectations, and competition in cable products may further intensify.