Event: From January to September 2017, the company achieved operating income of 1,051 million yuan, an increase of 37.41% over the previous year; net profit attributable to owners of the parent company was 257 million yuan, an increase of 139.40% over the same period last year. Key investment points The military business is developing rapidly, laying the foundation for future development. The company acquired Tomorrow Aerospace in 2015 and entered the field of aerospace parts manufacturing. According to the merger and acquisition agreement, China Airlines promised to achieve net profit of not less than 170 million yuan, 240 million yuan and 40 million yuan in 2015, 2016, and 2017 respectively. Tomorrow, Aerospace's net profit after deduction in 2015 and 2016 was 175 million yuan and 249 million yuan respectively, with completion rates of 103.01% and 103.60% respectively, exceeding promises. In the first three quarters of 2017, due to the rapid growth in aerospace revenue tomorrow, the company's operating income and net profit to mother achieved high growth. As one of the largest manufacturers of military components in China, tomorrow Aerospace will participate in various structural component support missions in the aerospace field. With the country's continuous investment in the aerospace field and the high threshold of the aerospace manufacturing industry, future performance will continue to grow at a high level. Although the agricultural machinery business declined due to industry policies and sentiment, agricultural machinery revenue in 2016 was 669 million yuan, a year-on-year decrease of 12.43%. Since the company's future growth focuses on the aerospace business, we believe that the overall decline in the agricultural machinery business will not affect the company's future growth logic. Accelerate regional layout and consolidate the foundation for development in the military industry. Tomorrow Aerospace continues to deploy in the field of aerospace parts manufacturing. It issued a foreign investment announcement on March 7, 2017. It plans to establish Tianjin Mingyu, Hebei Mingyu, and Shenyang Mingyu. Hebei Mingyu was established on May 19, 2017. On May 2 and May 16, 2017, Tomorrow Aerospace signed strategic cooperation agreements with China Airlines Shen Fei and China Airlines Guifei respectively. Through in-depth cooperation with Guifei, it is planned to transform and upgrade from parts manufacturing to most parts of manufacturing, and participate in aircraft design to become a first-class supplier to the Chinese aviation industry; it is planned to consolidate the company's military development foundation, enhance the company's supporting capabilities for aviation products in northern China, and consolidate strategic partnerships with major aviation OEMs through in-depth cooperation with Shen Fei. Tomorrow, aerospace is expected to further accelerate regional layout and consolidate and enhance the company's dominant position in the aerospace industry chain. Satellite communication projects continue to advance, and civil-military integration is developing in depth. On October 25, 2016, Tomorrow Aerospace and Maxwell plan to jointly invest RMB 100 million to establish a new company with Enos and others to develop a high-throughput broadband satellite constellation project. On March 7, 2017, the company held Sun Company Tibet Mingyu plans to order a Ka-band high-throughput communication satellite from the Fifth Academy of Aerospace for a transaction price of no more than 1 billion yuan. The star has a total weight of 5.5 tons, including 40 fixed point beams and 2 moving point beams. It will operate effectively in 35700 km geosynchronous orbit 15 years. We believe that the company has formed a first-mover advantage in the commercial satellite field through multiple layouts. The steady progress of the company's commercial space satellite business reflects the management's high strategic forward-looking nature. With the rapid development of China's commercial aerospace industry, the satellite business is expected to become the highlight of the company's future performance. Risk warning: Military business expansion falls short of expectations.