Maintain an “increase in holdings” rating, with a target price of 20.4 yuan. The company's revenue and net profit growth rate in 2017 were above 15%, of which net profit was 191 million yuan, in line with expectations. Compared to the market's disregard for the company's traditional home appliance business, we believe that in 2018, with the shortage of upstream raw materials being solved, the refrigerator inverter controller, the core product of the home appliance business, is expected to accelerate penetration; furthermore, military orders are expected to explode in 2018. The net profit forecast for 18/19 was fine-tuned to 2.5/327 million (-0.5%, +0.6%), the corresponding EPS was adjusted to 0.58/0.76 yuan, and the target price was maintained at 20.4 yuan. The overall performance in '17 was in line with expectations, and net profit was hampered by the reduction in restricted stock incentive expenses. On March 30, the company released its 17th annual report. The company achieved full-year revenue of 773 million yuan, an increase of 18.1%; net profit of 191 million yuan, an increase of 15.3% over the previous year. The overall performance was in line with expectations. Specifically: (1) The shipment volume of refrigerator inverter controllers in the second half of the year was dragged down to a certain extent due to the shortage of the raw material EPCOS common-mode capacitors, but the full year of '17 still achieved revenue of 151 million yuan, an increase of 71.26% over the previous year. The level of prosperity of the industry can be seen; (2) the military business with Huaqing Ruida as the main platform developed well in '17, but the estimated management costs for implementing restrictive stock incentives were close to 10 million. It had to be deducted from military business profits, so that the contribution profit was offset. 18-year outlook: refrigerator inverter controllers are expected to accelerate penetration, and military orders will experience explosive growth. As upstream manufacturers expand production, the shortage of raw materials such as common-mode capacitors in 2018 is expected to be solved. The company's refrigerator inverter controller shipments will resume a high growth rate, and the penetration rate is expected to increase rapidly, replicating the development path of the air conditioner conversion trend. At the same time, the military industry business will gain further strength as the radar simulator industry chain runs through, and is expected to usher in an explosion of orders in '18. Considering the revenue confirmation cycle, some orders may not be able to pay for revenue until '19. Catalyst: refrigerator inverter controller shipments exceeded expectations; new layout of military business. Core risk: There is a risk that new entrants will seize share in the home appliance business.