Event: The company released its report for the third quarter of 2017. From January to September 2017, the company achieved operating income of 1.28 billion yuan, an increase of 34.43% over the previous year; net profit attributable to shareholders of listed companies of 83 million yuan, a decrease of 23.27% over the previous year; and basic earnings per share of 0.0957 yuan, a decrease of 23.32% over the previous year. The main reason for the decline in the company's performance is that the price of raw materials in the traditional chemical business has risen rapidly, the price of finished products has lagged behind, and the gross margin has declined year-on-year. Expand the market for new materials and improve the chemical industry chain. The company is mainly engaged in R&D, production and sales of polyester resin series products for powder coatings and their raw materials in the field of traditional chemicals. It currently has an annual production capacity of 150,000 tons of various polyester resins. Shandong's shareholding subsidiary Lihuayi Shenjian's NPG project with an annual output of 30,000 tons was successfully put into operation, further improving the existing product line and boosting the company's rapid development in the field of new material applications. Since powder coatings have the characteristics of being solventless, non-polluting, recyclable, and resource-saving, the concentration of the industry will continue to increase in the context of stricter environmental protection. As a leading enterprise in the powder coating industry, the company enhances competitiveness by optimizing the product structure and continues to increase its scientific and technological innovation efforts, and its market share is expected to further increase. Expanding and strengthening the high-end equipment manufacturing sector, the development strategy of the two main industries is progressing steadily. The company entered the high-end equipment manufacturing field through the acquisition of 60% of Jiaye Airlines and Zhongxing Weiye's shares. The main products include aviation and aerospace-related molds, tooling frames, parts, high-speed train headings, evacuation systems and structural parts, and Beidou satellite navigation system application terminals. According to Jiaye Airlines' 2015-2017 non-return net profit of no less than 31.5 million, 41 million, and 51 million yuan, it is expected to be completed this year on the basis of excess completion in the previous two years. We believe that through the acquisition of enterprises with high technical thresholds and special professional qualifications in the field of high-end equipment manufacturing, the company will help achieve rapid expansion of military business, and will be able to exert the synergy between various business sectors, laying a solid foundation for realizing the dual development strategies of “new chemical materials” and “high-end equipment manufacturing”. Profit forecast and investment rating: We expect the company's net profit in 2017-2019 to be about 172 million yuan, 200 million yuan, and 227 million yuan; EPS is 0.20 yuan, 0.23 yuan, and 0.26 yuan; corresponding PE is 35 times, 30 times, and 27 times, giving it a “buy” rating.