Company Overview: The company is the core asset of Zongshen Industrial Group in the power field. Based on motorcycle engines and aerodynamics business, the company has successively expanded new businesses such as aero engines, new energy, and high-end components in recent years, aiming to become the world's leading power system integration service provider. The leading position of motorcycle engines has steadily transitioned to medium and large displacement. Although China's motorcycle production and sales volume are generally shrinking, thanks to the continuous development of external customers and the increase in sales of medium and large displacement engines, the company's motorcycle engine sales performance is relatively steady, and the overall market share is on the rise. In recent years, the company has increased the expansion of the medium to large displacement engine business, driving the average unit price of motorcycle engine products and the profit level to increase simultaneously. We judge that there is still room for a tenfold increase in sales of medium to large displacement motorcycles in China. The company's motorcycle engine business is expected to continue to benefit from the trend of consumption upgrading. Expanding the general machinery terminal product business, digging deep into overseas core customers, incremental companies have entered the field of general mobility with general power. At present, the products have fully covered the three categories of general power, general purpose terminal products, and small agricultural machinery. In 2018, the company completed the acquisition of Dajiang Power. The business integration of Tongji Company and Dajiang Power helps the company strengthen resource integration and collaboration in “procurement, R&D, manufacturing, and marketing”. Tongji Power complements the superior resources of terminal products, and consolidates the company's leading position in the industry. After the acquisition of Dajiang Power, the average unit price and profit level of the company's general equipment products increased significantly. MTD, the largest customer of the company's General Dynamics products, is in trouble with its overseas core supplier Bailitong (BGG). We expect MTD to transfer most of its orders to Zongshen Power, driving the company's GM export business to expand further. Aerodynamics products achieve medium- to long-term growth space for mass production, and downstream demand for the traditional main business, the motorcycle engine business, continues to shrink. In order to maintain long-term business growth, the company has increased its expansion into emerging businesses, and the aero engine business is the focus of the company's efforts. The aviation development company was established in 2016, the aviation development company obtained military confidentiality qualifications in 2017, mass production of various aero engine products was achieved in 2019, and the aviation development business gradually entered the implementation stage. After mass production of products began in 2018, the aviation development company's business scale grew rapidly. In 2019, it achieved revenue of 20.4 million yuan, gross margin was as high as 50.87%, and the profit level was far higher than the company's traditional business. The aviation development company has plenty of orders on hand, and the aviation development business has good growth and high profit margins. As the scale of the business expands rapidly, it is expected to become an important performance growth point for the company. The investment suggests that the company's overall share of motorcycle engines in the market is improving, and its leading position is constantly being strengthened. The increase in the share of medium to high-displacement motorcycle engine sales effectively hedges the shrinking demand for road vehicles, driving up average product prices and profits. After the acquisition of Dajiang Power in 2018, General Dynamics formed effective collaboration with the terminal product business, and the average product price and profit improved across the board; MTD, GM's largest customer, is expected to increase the company's supporting ratio and bring growth to the general aviation business. In recent years, the company has accelerated its transformation into new businesses. The aviation business combines growth and high profitability, opening up space for long-term growth for the company. The company's net profit for 2020-22 is estimated to be 648/7.92/1,019 million yuan, the corresponding EPS is 0.57/0.69/0.89 yuan, and the current stock price corresponding to PE is 13.99/11.45/8.90 times. Referring to the company's historical valuation range and taking into account the growth of the aviation development business, the company was given a 25 times PE valuation in 2021, corresponding to the target price of 17.25 yuan, covering the “buy” rating for the first time. Risks suggest that the scale of motorcycle production and sales has shrunk further; the progress of medium to high-displacement motorcycle engine business development is lower than expected; GM's overseas customer support ratio is lower than expected; and the development progress of the aviation development business is lower than expected.