Items:

1) on the evening of the 29th, the company announced the transfer of part of its wholly-owned subsidiary to the employee shareholding platform. At a transfer price of 1 yuan per share, the company transferred 30% of its wholly-owned subsidiary Chengdu Lijun Ring Intelligent equipment Technology Co., Ltd. to the employee shareholding platform-Gongqingcheng Liyu Investment Partnership (limited partnership). After the completion of this transaction, the company will hold 70% of Lijun's equity, and Liyu partnership will hold 30% of Lijun's equity.

2) on the evening of the 29th, the company issued an announcement on the capital increase of the wholly-owned grandson company and the introduction of the employee shareholding platform. Chengdu Dekun Aviation equipment Manufacturing Co., Ltd., a wholly-owned subsidiary of the company, increased its capital by 5 million yuan to the wholly-owned grandson company Chengdu Dekun Aerospace Technology Co., Ltd. at the same time, it introduced the employee shareholding platform-Gongqingcheng Taihang basic Investment Partnership (limited partnership) to increase the capital of Dekun Aerospace by RMB 15 million in the form of currency contribution. This time, the total capital of Dekun Air and Space is increased by 20 million yuan, and the price is determined to be 1 yuan per share through negotiation. After the completion of this capital increase, the registered capital of Dekun Aerospace has increased to 50 million yuan. Dekun Airlines holds a 70 per cent stake in Dekun Aerospace and a partnership holds a 30 per cent stake in Dekun Aerospace.

Guoxin military industry point of view: 1) the partnership system model is introduced, and the interests are bound by long-term incentive sharing, and the development is unhindered. 2) the professional coverage of aviation parts manufacturing business is comprehensive, and it is a predictable leading enterprise. 3) the company's roller press business is no longer a drag in the past, and is expected to exceed expectations. 4) risk hint: the volume of military business is lower than expected; the demand of civilian business is lower than expected. 5) Investment advice: we expect the company's net profit in 2021-2023 to be 330 million yuan, 560 million yuan and 800 million yuan, corresponding to PE 38X, 23x and 16X, with a "buy" rating.