Tanaka Seiki released its three-quarter report. The first three quarters achieved operating income of 367 million yuan, an increase of 388% over the previous year, net profit of 23.15 million yuan, an increase of 575% over the previous year, and net profit of 1.7 million yuan after deducting non-return net profit of 1.7 million yuan, an increase of 24 times over the previous year. The company's performance in the first three quarters increased significantly compared to last year, mainly due to the merger of Ocean Sunray (Ocean consolidated in November 2016). Also, according to Ocean Sunray, there was no 24-fold increase in the first three quarters. The company achieved net profit of 19.7 million yuan in the first three quarters, an increase of 24 times over the previous year. The main subsidiary, Ocean Sunray, has been consolidated since November last year. In January-September, the company's minority shareholders' profit and loss was 20.42 million yuan. Based on the company's 55% shareholding ratio in Ocean Sunray, it is roughly estimated that Yuanyang's net profit for January-September was about 45.4 million yuan. The parent company still failed to make a profit in the first three quarters due to the lower than expected delivery speed of wire winding machine products and the accrual of equity incentive expenses. Wireless charging cable winding devices are expected to explode next year. At present, dozens of small wireless charging cable winding devices provided by the headquarters to major customers have been shipped, with a stand-alone value of one million units. Although due to the pace of customer procurement, the shipping speed and quantity of wireless charging cable winding equipment at the headquarters this year were lower than expected, but the company's intended order for 2018 is expected to exceed 200 million yuan, and wireless charging cable winding equipment is expected to explode next year. Ocean Sunray will exceed its promises to complete its gambling performance. Ocean Sunray promised a net profit of 65 million yuan on gambling in 2017, and completed about 45.4 million yuan in the first three quarters. According to industry characteristics, the fourth quarter will be the traditional peak season for ocean, and we expect that Ocean's net profit for the whole year will exceed the promised completion. Benefiting from the increase in the popularity rate of 3D glass, hot bending machines are expected to become ocean's highlight business next year. Currently, hot bending machines developed by Ocean have made great progress in yield and energy consumption. It is expected that the acquisition of Yuanyang's remaining shares will be completed by the end of the year. Currently, the parent company's plan to acquire the remaining 45% of Ocean's shares has been accepted. It is expected that Ocean will become a wholly-owned subsidiary of the company by the end of this year. Performance forecasts and investment recommendations. We expect Tanaka Seiki's net profit in 2017/2018 to be 0.47/163 million yuan, corresponding to 120/35 times PE. Although the short-term valuation is high, the company, as the only wireless charging target among A-share machinery companies, has a certain scarcity, and is expected to benefit from the increasing trend in smartphone wireless charging penetration and maintain prudent recommendations. Risk warning: The procurement speed of wireless charging wire winding equipment is lower than expected, and CNC sales are lower than expected.