Strategy: Successfully complete the front-loading transformation, and the intelligent cockpit opens a new growth point. The company has completed the smooth transformation of front-loading. We expect the proportion of front-loading to increase to more than 60% by 2017. Relying on front-loading machines for product line expansion, the company aims to become a leading company in intelligent cockpits in China. By combining horizontal level (product line) and vertical level (customer) strategies, the company is expected to open up new market space. At the level of execution, the company has introduced a team of global T1 giants internally and is deeply tied to Fujitsu Tenten externally. We are optimistic that the company's strategy will continue to be implemented. Horizontal expansion: The smart cockpit is about to be launched. It is expected to increase by about 300 million yuan in 2018. According to the company, the company's intelligent cockpit (double 12.3 LCD instrument and central control) has completed research and development, and the corresponding models are expected to be launched in October. The car interior, represented by a smart cockpit, contains a sense of high technology, and is expected to become the core consideration for consumers in car purchases and the core of competition among manufacturers. According to industry chain research, one of the top three factors consumers consider when purchasing the Roewe RX5 is the interior (smart cockpit). According to industry research, the unit price of a smart cockpit is four to five times that of a traditional car, and the former has replaced the latter as a trend. Relying on the introduction of an international T1 giant team and deep ties with domestic autonomy, the company is the first domestic enterprise that is expected to actually implement an intelligent cockpit product. According to industry research, benefiting from the increase in product value, the average unit price of the product is about 6,000 yuan, and the gross margin is about 35%. Based on this, with reference to the potential sales volume of related models, it is expected that net profit will increase by about 300 million yuan in 2018. If sales continue, the company's intelligent cockpit is expected to further expand new customers. Vertical expansion: More than Zotye, the next three years will usher in a continuous customer upgrade phase in terms of passenger cars. With Zotye as an entry point, the company has successfully transformed its front equipment. We expect that in 2017, our core customers will still be mainly independent models represented by Zotye. However, the company has long-term goals and targets joint ventures and foreign manufacturers. Relying on the close relationship with Fujitsu, and with the completion of the inspection of the new plant in Huizhou, we are optimistic that the company's customers will upgrade to a GAC joint venture in 2018 and that customers will enter Toyota Global in 2019. In terms of commercial vehicles, commercial vehicles are a natural extension of passenger cars, and at the same time, the penetration rate of vehicles is currently low. Hangsheng Industrial's main products are commercial vehicle engines, with a domestic market share of nearly 30% according to industry research. Relying on the acquisition of Hangsheng Industrial, the company was able to upgrade passenger cars to commercial vehicle customers. Strongly recommended, optimistic about the smart cockpit circuit, a scarce target for high endogenous growth: net profit for 2017 and 2018 is estimated at 200 to 300 million yuan, with current prices corresponding to 2017 and a price-earnings ratio of about 35X and 23X in 2018. Benefiting from the smart cockpit industry trend, it is a probable event that the company will achieve high endogenous growth (40% + over the next three years). Maintaining the buying rating, the target price is 26 yuan, corresponding to 2018 PE 36X. Risk warning: The sales volume of related models falls short of expectations, and the smart cockpit business falls short of expectations