Key investment points: The transformation and upgrading strategy was fully implemented in 2016. The results for the first quarter of 2017 are expected to maintain rapid growth. The 2016 report reported that the company achieved net profit of 50.82 million yuan, an increase of 86.1% year on year, and an increase of 109% year on year after deduction, mainly due to the merger of holding subsidiaries Intest and 95 Smart Driving to increase profits. While the company is based on its main business, it is actively carrying out capital operations. In 2016, the company invested 246 million yuan to acquire 58.23% of the shares of the Internet of Vehicles Operation and Service Company, and has successively participated in Guangzhou League News and Rainbow Wireless to participate in the establishment of the Xingmin Automobile Industry Fund to fully implement the transformation and upgrading strategy. The company also announced that the net profit attributable to shareholders of listed companies is expected to change 50%-100% in the first quarter of 2017, corresponding to a net profit range of 2429 to 32.39 million yuan. The increase is still due to an increase in the consolidated profit of the holding subsidiary. Intest and 95 Smart Driving contributed to the main future profit growth. Intest's 2016 revenue increased 387% year-on-year, mainly due to the fact that the same period in 2015 combined revenue for only 2 months. Based on the order situation, T-BOX product sales are expected to maintain rapid growth in 2017. It is estimated that in 2016, the company's share of the new energy vehicle T-BOX model market is nearly 40%. The future will be accompanied by rapid growth in the NEV market for a long time, and further expand into the traditional automobile sector. The company completed the acquisition procedure for 58.23% of the shares of 95 Smart Driving on October 31, 2016. During the reporting period, it only consolidated operating data for November and December, and revenue growth for the full year of 2017 will be reflected more comprehensively. Profit forecast and investment rating: Based on the principle of prudence, when the non-public offering is not finalized, the dilution of share capital and the factors affecting performance are not considered. The company's 2017/2018/2019 EPS is estimated to be 0.17/0.23/0.33 yuan, respectively, and the corresponding PE is 85/64/45 times, respectively. The 2016 non-public development plan has now been approved by the shareholders' meeting. It is proposed to issue no more than 180 million shares and raise 2.17 billion yuan in capital, of which the actual controller Mr. Wang Zhicheng plans to subscribe for no less than 100 million yuan. The capital raised will be further invested in the vehicle networking hardware T-BOX and data operation service business. On this basis, epitaxial will enter in-vehicle smart terminals, TSP services, in-vehicle electronic products, and other vehicle networking extension services. If subsequent non-public sales are successfully completed, it will further enhance the company's core competitiveness and profit level, and cover it for the first time and give it an “increase in ownership” rating. Risk warning: The penetration rate of T-box products is lower than expected; the development progress of the Internet of Vehicles is lower than expected, and the non-public offering cannot be successfully completed.