The company recently announced that it plans to issue no more than 250 million additional shares and raise no more than 7 billion yuan to invest in the construction of a high-end electric vehicle R&D and production base in Germany. Affected by factors such as energy safety and environmental protection, new energy is an inevitable development direction for automobiles. The company is expected to rely on the foundation of the German automobile manufacturing industry and the advanced technological advantages of the NEV industry to develop and produce high-end electric vehicles, and collaborate with established domestic NEV platforms to develop the middle and high-end electric vehicle market in China using Germany's leading electric vehicle R&D technology. The development prospects are promising. Furthermore, the company has invested in new energy vehicle companies such as Shenzhen Wuzhoulong and Jiangsu Kawei. The overall layout of the NEV industry is perfect, which is expected to benefit in the long term. Electric logistics vehicles are expected to enter the promotion catalogue in the second half of the year, and sales are expected to explode. Both Wuzhou Dragon and Jiangsu Kawei have a variety of electric logistics models, which are expected to receive a large number of orders, driving the company's performance to grow dramatically. We expect the company's earnings per share in 2016-2018 to be 1.06 yuan, 1.11 yuan, and 1.27 yuan, respectively, giving the company 20 times the 2017 price-earnings ratio, a reasonable target price of 21.60 yuan, and maintaining the purchase rating. The main point supporting the rating is that the NEV layout is perfect, and the development prospects are promising. The company now plans to raise 7 billion dollars to invest in the construction of a high-end electric vehicle R&D and production base in Germany. Relying on the foundation of the German automobile manufacturing industry and the advanced technological advantages of the NEV industry, it will develop and produce high-end electric vehicles, and collaborate with existing domestic NEV platforms to develop the middle and high-end electric vehicle market in China using Germany's leading electric vehicle R&D technology. Furthermore, the company plans to acquire 35% of Jiangsu Kawei's shares. It has already acquired 48% of Shenzhen Wuzhoulong's shares, subscribed for 35% of Changchun New Energy's shares, and the controlling shareholder Zhonghuan Investors has acquired 75% of electric vehicles in Stuttgart, Germany. The overall layout of the NEV industry is perfect, which is expected to benefit in the long term. Electric logistics vehicles are expected to enter the promotion catalogue, and Wuzhou Dragon and Jiangsu Kawei will fully benefit. In the first half of the year, electronic logistics vehicles failed to enter the promotion catalogue due to industrial policy adjustments and other reasons, leading to a slump in terminal sales. Electric logistics vehicles are expected to enter the promotion catalogue in the second half of the year, and sales are expected to explode. Both Wuzhoulong and Jiangsu Kawei, in which the company is a shareholder, have a variety of electric logistics models, which are expected to receive a large number of orders and drive rapid growth in the company's performance. The main risks faced by the rating 1) The development of business such as interior and exterior parts fell short of expectations; 2) The development of the NEV business fell short of expectations. Valuation We expect the company's earnings per share in 2016-2018 to be 1.06 yuan, 1.11 yuan, and 1.27 yuan, respectively, giving the company 20 times the 2017 price-earnings ratio and a reasonable target price of 21.60 yuan, maintaining the purchase rating.