Incident: The company released its three-quarter report: In the first three quarters of 2016, it achieved operating revenue of 800 million yuan, an increase of 14% over the previous year, and achieved net profit of 89.93 million yuan to mother, an increase of 116% over the previous year. Of this, net profit of 79.26 million yuan was deducted, an increase of 77.5% over the previous year. Key investment points: The sharp increase in performance in the first three quarters was mainly due to increased revenue from fiber optic cables and equipment cables, lower raw material prices, and higher gross margins of all products. Profit in the third quarter increased by 1.85% year on year, which was lower than in the first half of the year. We expect the company's performance to maintain a high growth rate throughout the year, benefiting from the increase in the price of optical fiber, the reduction in the gross margin of equipment cables, and the successive delivery of UHV cable orders in the second half of the year. The price increase of optical fiber is expected to continue, and the accelerated construction of UHV will bring new volume. China Mobile collected 6114,3468 core kilometers of ordinary optical cable products in 2016. According to the quotes of various manufacturers, the price of optical fiber was fixed at 65-68 yuan/core kilometer, an increase of more than 20% compared with the previous China Mobile collection price. At the same time, anti-dumping of precast rods has drastically reduced production capacity. Prices of precast rods and optical fibers have risen, while domestic production capacity will take a long time to be released. It is expected that the rise in optical fiber prices will continue to some extent. UHV entered the peak of construction in 2016-2017. The price of UHV cables is high. The company has already won bids for several lines, and it is expected that performance will gradually improve. The company has been in the military business for a long time. The company's aviation cables have been mass-produced, and the steady-phase cable passed the design review in 2014, which is expected to open up new markets. The majority shareholders' equity injection into Tongguang Ocean Optoelectronics was terminated, and cash was injected into Tongguang Information to raise expectations for subsequent asset injections. The company suspended trading in the first half of the year to acquire Tongguang Ocean Optoelectronics, which specializes in submarine cables under Tongguang Group, the majority shareholder, terminated. Also, recently, it acquired Tongguang Information, which specializes in public network optical fiber, in cash (profit of 18.31 million yuan in 2015), increasing profits while further extensions can be expected. Maintaining the company's “buy” rating: Excluding possible and unfinished extensions, the company's 2016-2018 EPS is expected to be 0.44 yuan, 0.69 yuan, and 0.88 yuan, respectively. Corresponding PE is 40 times, 26 times, and 20 times, respectively. We are optimistic about the company's boom in civilian and military cables, optimistic about the company's extension space, and maintain the company's “buy” rating. Risk warning: general market systemic risk; cable profit falls short of expectations; epitaxial progress falls short of expectations