Basic findings, value evaluation and investment recommendations Domestic ODM leader for rechargeable backup lighting and rechargeable fans: The company is engaged in the development and production of rechargeable backup lighting products (including lighting, flashlights, fire emergency lights) and rechargeable AC/DC fans (including table fans and floor fans). The revenue in 2012 was 560 million yuan (YoY 12%), and the net profit was 62 million yuan (YoY 16%). The company's business model is mainly ODM exports. Export revenue accounts for 70% of stock trading, and the main market is Asia; the domestic sales brand “KENNEDE” contributes about 10% of sales revenue. Currently, LED lamps account for more than 60% of the lamps sold by the company. Demand for rechargeable backup lighting products is expected to increase steadily in the future: the main markets for rechargeable backup lighting products are: 1) developing countries and regions with unstable electricity supply; 2) outdoor leisure and sports markets; and 3) backup lighting markets for fire and public facilities. From 2008 to 2012, the export value of China's rechargeable backup lighting maintained a relatively rapid growth rate. Due to poor infrastructure in Asia, Africa, and Latin America, and some countries do not give priority to safeguarding civilian electricity, the gap in civilian electricity will persist for a long time; however, the outdoor leisure market continues to develop, so it is expected that demand for backup lighting will increase steadily in the future. The competitive landscape in the lighting market is very scattered, and increasing concentration will be a trend in the long run. The company is the largest exporter of rechargeable lighting products in China. Its competitive advantages are mainly reflected in scale advantages, R&D advantages, and flexible manufacturing advantages. The future expansion of the product line will develop along the technology path of rechargeable and AC/DC use, and it is expected that it will not enter the general lighting field in the short term. The company's operating indicators such as accounts receivable turnover, inventory turnover, and operating cash flow performed well, but the net interest rate was as high as 10%, and the sales expenses ratio was only 1%. It is expected that in the future, the company may need to invest more in sales expenses to cope with fierce competition. Fund-raising projects are mainly used to expand production and build R&D centers, helping to ease the limitations of insufficient production capacity and enhance R&D capabilities. Profit forecast and investment advice: The company's 2013 performance declined due to increased costs such as plant relocation and financial expenses. In 2014, benefiting from sales recovery and interest income contributions, the growth rate fell back to normal in 2015. The company's revenue from 2013 to 2015 is expected to be 5.6, 6.7, and 750 million yuan, up 0.7%, 19.4% and 11.8% year on year, and net profit of 0.39, 0.59 and 66 million yuan, up -36%, 50%, and 11% year on year, of which the EBIT growth rate in 2014 was 13%. Since the probability of overfunding is low, assuming the number of shares issued is 23.35 million shares, the corresponding EPS is 0.42, 0.64, and 0.71 yuan. Compared with existing lighting companies in the A-share market, Jinlight is in a smaller rechargeable backup lighting market, and mainly exports ODM, so comparability is weak. We refer to the valuation of export ODM companies and consider market sentiment factors to give a certain premium. We give the company 16-19 x 14 EPS, and the corresponding target price is 10.16-12.06 yuan.