Key investment points: 2015 performance inertia declined, but there was an improvement in the first quarter of this year. The company announced that it achieved operating income of 434 million yuan in 2015, down 20.8% year on year; realized total profit of 7.1123 million yuan, down 77.86% year on year; realized net profit attributable to shareholders of the parent company was 6.5967 million yuan, down 78.44% year on year; basic earnings per share was 0.02 yuan, down 77.78% year on year. At the same time, the company announced a dividend plan and plans to distribute a cash dividend of 0.3 yuan (tax included) for every 10 shares. In addition, the company also announced this year's quarterly report. In the first quarter, the company achieved a total operating income of 116 million yuan, an increase of 14.14% over the previous year; net profit attributable to shareholders of listed companies after deduction was 2,227,800 yuan, an increase of 93.53% over the previous year. Warming demand and two-wheel drive in domestic and foreign markets helped the company's performance to develop due to the poor economic situation at home and abroad. The domestic real estate market continued to decline last year, and the proportion of new housing starts maintained negative growth throughout the year. Ultimately, it also led to weak market demand in the hardware tool industry, and the company's profit level fell to a low point in recent years. However, we believe that after more than two years of adjustments, the company's performance is expected to reverse this year. First, the real estate market continued to improve after the Spring Festival, and the area of new housing construction increased by 19.2% in the first quarter. Overcoming last year's decline, the improvement in the real estate market will directly drive demand for hardware tools. Second, in recent years, the company has been actively expanding into high-end tools in terms of product structure, while also actively entering overseas markets. In 2015, the company's overseas market sales accounted for more than 50%, and this share may continue to expand in the future. Therefore, we believe that the company's performance may reverse this year. The high-speed rail brake pad loading test is imminent, and profit growth is at the peak of the high speed rail brake pad sector. The company has basically completed the early R&D and manufacturing process, and has also obtained CRCC certification. This year, the company will speed up the last hurdle before mass production of high-speed rail brake pads — the loading test. We expect the company to industrialize high-speed rail brake pads in the first half of 2017 as soon as possible. It is conservatively estimated that in the first year of entering the brake pad market, the company will receive a market of 50-10,000 pieces, or revenue of 35-70 million yuan; by 2020, the company is expected to obtain about 20% of the brake pad market. The company's high-speed rail brake pads have broad prospects for development and may become a new driving force for the company's growth in the future. Profit forecast and investment recommendations Despite a significant decline in the company's performance last year, given that demand in the traditional hardware industry began to warm up, and the company is also optimizing the product structure and sales area, and the company is also stepping up final work before mass production of high-speed rail brake pads, the company is expected to reverse its performance this year. Therefore, we continue to maintain a “buy” rating for the company. It is expected that the company will achieve EPS of 0.09, 0.15, and 0.26 yuan/share respectively from 2016 to 18.