Performance promises have been exceeded, and the product structure has changed.

Compared with last year, the company's product structure has changed greatly. The monocrystalline furnace achieved revenue of 556 million yuan, an increase of 341.5% over the previous year, accounting for 53% of total revenue, making it the company's largest source of revenue. The sapphire crystal business, which is mainly used for consumer windows, also surpassed the crystal rod business to become the second largest product, achieving revenue of 242 million yuan, an increase of 173.4% over the previous year.

Transform to an integrated “equipment+process” solution provider.

The sale of 2,000 monocrystalline furnaces to the joint venture Inner Mongolia Jinao Optoelectronics marks the company's transformation from a business structure dominated by sapphire crystal sales to a sapphire long-crystal “equipment+process” integrated solution provider. The share of equipment sales and related service revenue will increase dramatically in 2016. Making full use of the electricity price advantage of the Inner Mongolia region will have a major impact on the domestic sapphire production capacity layout and prepare for future consumer electronics applications.

Profit forecasts and valuations.

Considering the impact of Inner Mongolia's single crystal furnace order, we adjusted the company's 2016-2018 EPS forecast to 1.04, 1.39, and 1.61. The current stock price corresponds to 2016-2018 PE of 28X, 21X, and 18X. The target price is 49.6 yuan, corresponding to the 2016 PEG of 0.28, maintaining the “buy” rating.