Event: The company released the 2016 third quarter report on the evening of October 24. During the reporting period, the company achieved operating income of 487 million yuan, a year-on-year decrease of 17.78%; realized net profit attributable to shareholders of listed companies of 218.495 million yuan, a year-on-year decrease of 64.74%; and realized basic earnings per share of 0.04 yuan, a year-on-year decrease of 66.67%. Key investment points: Revenue fell short of expectations, and ZTE equipment's performance dragged down. In the third quarter of 2016, the company achieved operating income of 136 million yuan, a year-on-year decrease of 44.99%, a year-on-year decrease of 11.79%; net profit loss of 3,316,000 yuan, a year-on-year decrease of 107.73%, a year-on-year decrease of 139.21%. The main reasons why the performance did not meet expectations include two aspects. First, there has been no substantial improvement in the execution of orders from the parent company, and orders for HVAC equipment are basically the same as in the same period last year; on the other hand, ZTE Equipment, a wholly-owned subsidiary, was impacted by the downturn in the downstream industry, and its performance in the third quarter fell sharply. The reduction in orders for special pipe fittings products in the coal chemical, petrochemical and other fields greatly affected the overall gross profit margin of the company's products, and its gross margin fell 4.29 percentage points from the same period last year. The printing of the first heavy metal 3D printing technology simulation has been completed. It is one step closer to industrialization. Since thorough preparations have been made in the early stages, the printing of the simulated part of the CAP1400 nuclear power main steam pipeline penetrating part has been carried out smoothly, and the printing of the second and third penetrating parts has also been scheduled. According to the plan, after the printing of the first analog piece is completed, it will be handed over to relevant nuclear power suppliers for subsequent processing and product performance testing. Industrialization is gradually approaching. At the same time, the first stage of basic performance testing of the ACP100 pressure vessel printing project with the China Nuclear Power Research and Design Institute has also been basically completed. This is an experiment and application of the company's 3D printing technology on small reactors. The “prudent recommendation” rating was given in part by considering the 150 million yuan demolition compensation factor and lowered the company's main revenue growth rate. The EPS for 2016 to 2018 is expected to be 0.11 yuan, 0.21 yuan, and 0.26 yuan, respectively. Considering the company's current high valuation, the rating was downgraded to “prudent recommendation.” Risk warning. The “13th Five-Year Plan” nuclear power installation fell short of expectations, and the industrialization of 3D printing was blocked