As the starting point for the transformation of the communication power supply industry, it is a wise move for the company to actively expand HVDC: the communication power supply industry has recently undergone important changes: First, the main customers have changed from traditional telecom operators to Internet-IDC operators, and the proportion of large IDCs in application scenarios is getting higher and higher. Operators have had to slow down or even cut capital expenses due to stagnant revenue and profit growth. At the same time, Internet companies are continuously increasing their capital expenditure, which will gradually replace the investment position of operators in the information industry. We expect Internet companies' capital expenditure to completely surpass telecom operators in about 10 years. Second, the power supply pattern has changed. Relying on the advantages of saving investment, energy saving, and floor space, HVDC has gradually completed the replacement of traditional UPS in the process of continuously improving reliability. Therefore, companies that can launch high-performance HVDC products in the near future and seize large customers such as BAT will gain a leading edge in the industry. We believe that Power Source has accumulated many years of experience in DC power supply technology and product development, launched HVDC products resolutely and quickly, actively expanded important customer resources such as the three operators and BAT, and has great potential for development. The energy-saving business has entered a harvest period, increasing continuous cash flow for the company: In the first half of this year, the company invested in the construction of the southwest stainless steel converter waste heat cascade utilization and dust removal project, and the WISCO sintering plant 3 #烧结环冷机余热回收利用改造项目、武钢炼铁厂五 #高炉鼓风脱湿改造项目、子公司青海民和动力源和石嘴山动力源的余热发电项目陆续完工并投入使用。 The company's energy saving business is in the harvest period. Various projects continue to reap steady cash flow, and the revenue growth rate has reached 118%. The allotment plan was approved to further expand production capacity and increase R&D investment: The company's allotment plan was approved, and it plans to raise 800 million yuan in capital. After receiving capital, the company, on the one hand, continued to expand the production capacity and technical process level of the Anhui factory, and on the other hand, invested close to 300 million yuan to build a research and development center to maintain the company's technological advantages. Furthermore, the company's repayment of part of the bank loan will also strongly reduce financial expenses and enhance the company's profitability. Profit forecast and investment rating: The company's 2016-2018 EPS is expected to be 0.17 yuan, 0.21 yuan, and 0.26 yuan, corresponding to PE66/56/44X. We are optimistic about the company's layout in the HVDC industry and expect 2017 to enter a period of rapid development, giving it a “buy” rating. Risk warning: There is a risk that the HVDC industry will develop less than expected, there is a risk that gross margin will decline due to increased competition, and there is a risk that Tower's repayment speed is too low.