Gongda Electroacoustic: The main business of Gongda Electroacoustic, a leading domestic acoustic device manufacturer, is the manufacture of electroacoustic components and components. Its main products include miniature electret microphones, silicon micromicrophones, micro speakers/receivers and their array modules. It is a national high-tech enterprise and one of the top 100 electronic components enterprises in China. The company continues to invest in R&D, and its ability to innovate independently is constantly increasing. The market share of the company's miniature electret microphone product industry ranks among the highest in the world and domestically. As of the first half of 2017, the company has been granted 212 patents, and has applied for 69 patents, and the company's product quality level has reached 50 PPM. The company's main customers include well-known international and domestic companies such as Harman, Chrysler, Honeywell, Sennheiser, SONY, Panasonic, and Huawei. Wanmao Acoustics Holdings, with the support of Xiaomi and Big Fund, is embarking on a new journey. Recently, the company announced that Wanmao Acoustics will acquire 15.27% of the shares of all listed companies held by Weifang Hi-Tech at a consideration of 995 million yuan and become the company's new controlling shareholder. The main business of Wanmao Acoustics is the headphone business. The founder of the company, Xie Guanhong, is a former executive of the core division of Honghai. After the establishment of Wanmao Acoustics, he mainly developed headphone products. Since its establishment in '13, the company has sold more than 40 million headsets, and is known as the father of Xiaomi Piston Headphones. We expect the Xiaomi smart hardware ecosystem to begin to explode in '18. Shunwei Capital, a subsidiary of Xiaomi, currently holds 11.3% of Wanmao Acoustics. With R&D and capital advantages, we expect Wanmao Acoustics to fully benefit from the vigorous development of the Xiaomi ecosystem. The National Integrated Circuit Industry Fund will invest 400 million yuan to obtain 19.44% of the shares after the investment, becoming Wanmao's second largest shareholder, which will further enhance Wanmao's overall competitiveness in the acoustics and semiconductor industry chains. We judge that after Wanmo Acoustics Holdings Gongda Electroacoustics, with the support of Xiaomi, Big Fund, etc., Gongda Electroacoustics and Wanmao Acoustics will develop collaboratively. The company will rapidly develop and improve in terms of products, customers, technology, etc., and the company's acoustics business will embark on a new journey. Investment recommendations We expect revenue for 2017-2019 to be 816/10.2/1.38 billion yuan, respectively, net profit to mother of 0.20/0.53/108 million yuan, and EPS 0.06/0.15/0.30 respectively. The current stock price corresponds to PE of 187/72/35, respectively, giving it a “buy” rating. Considering the cost of Wanmao's transfer of controlling interest, the target price is 18 yuan. Risk warning: equity transfer has not been successfully completed; business integration is not smooth;