The annual performance fell short of expectations, and the calculation of equity incentive expenses affected the annual results: the company released the 2018 annual results forecast, and is expected to achieve net profit attributable to shareholders of listed companies of 85 million yuan to 95 million yuan, an increase of 5.80%-19.50% over the same period last year, compared to 80 million yuan in the same period last year. In the fourth quarter, the company expects to achieve net profit of 12 million yuan to 22 million yuan in a single quarter, down 27%-60% from the same period last year, and 30 million yuan in the same period last year. In 2018, the company calculated equity incentive expenses of about 16 million yuan, which had a certain impact on the company's operating results in 2018. The impact of the company's non-recurring profit and loss on net profit is approximately RMB 6.48 million. There are three main reasons for the increase in this year's performance compared to the same period last year: the company's sales revenue for electronic welding equipment and intelligent machine vision inspection equipment has steadily increased; some of the company's special equipment for optoelectronic modules has been put into the market and achieved mass sales, forming a new profit growth point; the company has received a year-on-year increase in software tax rebates and government subsidies, and the company's use of idle capital for financial investment, further boosting the company's profit growth. The company plans to spend 200 million yuan to repurchase shares, which will be used for employee stock ownership plans or equity incentives, and convertible bonds: On January 9, the board of directors of the department agreed that the company would use its own funds to repurchase public shares. The total capital for this repurchase should not be less than RMB 100 million, not more than RMB 200 million, and the price of the repurchased shares should not exceed RMB 24 yuan/share. The implementation period for this repurchase is within 12 months from the date the company's board of directors deliberates and approves the share repurchase plan. Assuming that the maximum repurchase amount is 200 million yuan and the repurchase price is 24 yuan/share, after all of these repurchases are implemented, the number of repurchases will be about 8,333,333 shares, accounting for about 3.42% of the company's current total share capital. If 50% of the shares of this repurchase, as estimated above, are used for employee stock ownership plans or equity incentives, and 50% are used to convert corporate bonds issued by listed companies that can be converted into stocks, and all are locked down. The company's repurchase plan has fully demonstrated the management's confidence. The profit of the electronic assembly business is stable, and the optoelectronic module business has become a new profit growth point: the company is a leading enterprise in the electronic assembly equipment industry. The company achieved revenue of 465 million yuan in the first three quarters, an increase of 36.66% over the same period last year and net profit of 73 million yuan, an increase of 42.18% over the same period last year. Among them, traditional electronic assembly related business accounted for about 82% of sales, and business related to optoelectronic modules accounted for about 18% of sales. The main customers in the electronic assembly business are domestic first-tier companies, including Foxconn subsidiaries, Flextronics, Lansi Technology, Gree Electric, Huawei, and Midea Group. The company has strong bargaining power with customers. In terms of optoelectronics business, the company has now achieved part of its sales revenue. Major customers include OFIL Group, BOE, Shenzhen Sunchuang, Shunyu Optoelectronics, and Ziwenxing. The company's optoelectronics business implements a division system. It consists of three divisions, namely the visual display division, the packaging project department, and the FPD division. Each division has independent managers to operate, develop collaboratively, and ultimately be managed uniformly by the company's general manager. Investment advice: We forecast that the company's EPS for 2018-2020 will be 0.36 yuan, 0.71 yuan, and 0.94 yuan, respectively, and the corresponding PE will be 41 times, 21 times, and 16 times, respectively. Maintain a “Recommended” rating. Risk warning: competition in the industry has intensified; the construction progress of high-tech centers has not met expectations; and the company's sales have fallen short of expectations due to changes in process technology.