Event: The company released its annual report on April 19. In 2016, it achieved operating income of 1,396 billion yuan, an increase of 7.32% over the previous year, and realized net profit attributable to the parent company of 406.18,700 yuan, a year-on-year decrease of 5.55%. The company released its 2017 quarterly report. During the reporting period, the company achieved operating income of 352 million yuan, an increase of 27.60% over the previous year, and realized net profit attributable to shareholders of listed companies of 126.12,300 yuan, an increase of 44.86% over the previous year. Comment: The NEV market is developing rapidly, and the high-end semiconductor market is in high demand. On November 29, 2016, the State Council announced the “13th Five-Year Plan for the Development of Strategic Emerging Industries”, which clearly states that the application ratio of new energy vehicles will be greatly increased to achieve production and sales of more than 2 million vehicles in that year by 2020. Combined with domestic NEV sales volume of only 507,000 units in 2015, NEV production and sales will maintain a compound annual growth rate of at least 40.9% by 2020. IGBT is the core component of new energy vehicles, and domestic replacement is in high demand. Currently, the company has successfully developed sixth-generation IGBT products and received good feedback in the field of new energy vehicles, which is expected to achieve a real breakthrough in domestic production in the IGBT field. The production line has been fully optimized and upgraded, and the “actual mass production implementation” capability has shown an advantage. It has more than 20 patents in terminal design, process manufacturing, and product design. As a leading enterprise in the semiconductor industry, the company has scarce “actual mass production implementation” capabilities and can quickly respond to the ever-expanding demand of the market. At the same time, the company has gradually upgraded its production line on the basis of the existing 4, 5, and 6-inch platforms. Among them, the dual-desktop silicon controlled chip has achieved the launch of a full range of products, catering to future smart home market expansion trends, so as to occupy a larger market share in the white power sector. The military industry advocates autonomy and control, and the civil-military integration strategy welcomes opportunities. With the development of high-end weapons and equipment towards electromagnetization, the military industry's demand for power semiconductor devices is increasing, and the country's “autonomous and controllable” requirements will further push China's core power semiconductor devices to achieve import substitution. The company has become the first batch of “military and civilian integration” pilot units. It has accumulated relevant experience in early cooperation with military enterprises, and has carried out in-depth cooperation with more than 100 relevant domestic research institutes and enterprises. The effects of the civil-military integration strategy are initially apparent. Valuation and financial forecast: The company's 2017-2019 operating income is estimated to be 15.64, 17.70, and 2,010 billion yuan, net profit of 0.55, 0.70 million yuan and 91 million yuan, and EPS of 0.07, 0.10 and 0.12 yuan respectively. Risk warning: The progress of the company's project fell short of expectations.