Incident: The company released its 2017 annual report, achieving total revenue of 1,854 billion yuan, an increase of 3.48%; net profit attributable to shareholders of listed companies of 405 million yuan, an increase of 61.57% over the previous year; and basic earnings per share of 0.27 yuan/share. Key investment points: Increased prosperity in the military industry promotes the rapid development of the company's military business: Tomorrow Aerospace, a wholly-owned subsidiary of the company, achieved operating income of 1,640 million yuan, an increase of 51.48% over the previous year, and achieved net profit of 465 million yuan, an increase of 75% over the previous year. With the uncertainty of the international situation and the increasing strategic pressure on China's periphery, and at the same time, China's strategic security border gradually shifts from the territorial border to the economic border, and the direction of military construction continues to expand. China's military spending is expected to continue to grow steadily, providing a strong guarantee for the comprehensive upgrading of China's weapons and equipment construction, and the military industry is expected to usher in a long boom cycle. With its technical advantages in aviation, aerospace, and engine structural components in this environment, Tomorrow Aerospace's main business revenue has increased dramatically. The expansion of the civil aircraft business provided a new impetus for the company's performance: Tomorrow, Aerospace and France's Safran Group signed a “Long-Term Agreement for the Supply of Aviation Products”. Tomorrow, Aerospace provided it with aviation product order services as a long-term supplier of Safran Group, and received the first batch of zero and component orders of US$89.7269 million. In recent years, demand in the civil aviation aircraft market has continued to rise. The two giants, Boeing and Airbus, have been continuously revising the new civil aviation aircraft market space forecast data for the next 20 years. In the future, China's civil aviation will have huge aircraft procurement needs. The production capacity cooperation model for civil aviation procurement will promote the further transfer of international aviation subcontract orders to the domestic market. Tomorrow, Aerospace passed supplier maturity reviews from several companies, laying the foundation for further signing long-term agreements with major international aviation companies. Profit forecast and investment rating: The company's performance continues to grow in an environment where industry sentiment has improved markedly. At the same time, with the further implementation of international subcontract orders, it is expected to provide new momentum for the company's profits. We forecast the company's 2018-2020 EPS to be 0.41 yuan, 0.55 yuan, and 0.71 yuan respectively. The corresponding PE was 24.03, 17.70, and 13.79 times, respectively, giving a “buy” rating. Risk warning: military boom and civil aircraft business development fall short of expectations