Incident: The company released the 2017 performance forecast announcement. The company's performance is expected to increase by 49,3813 to 54.3813 million yuan, and the net profit attributable to shareholders of listed companies is expected to reach 90 million to 95 million yuan, an increase of 121.57% to 133.88% over the previous year. Non-net profit attributable to shareholders of listed companies is expected to increase by 172.76% to 189.81% year on year. Demand in the power semiconductor market is strong, and sales revenue is rising. As new automotive, new energy, and industrial demand continues to grow, the power semiconductor market demand is increasing. According to international e-commerce reports, MOSFET delivery in the third quarter of last year increased from 8 weeks to more than 12 weeks, and prices of some products rose. Strong demand in the power semiconductor market has directly driven a sharp increase in the company's capacity utilization rate and sales revenue. Product systematization has outstanding advantages, and IGBT opens up room for growth. The company continues to increase its product serialization process, gradually shifting from a single device supplier to a solution provider. At present, the company has established a domestic competitive power semiconductor device product line, including high-end diodes, single and bidirectional silicon controlled silicon, high voltage MOS series, low voltage Trench MOS series, and trench-FS IGBT. While maintaining its product advantages in the consumer electronics field, the company continues to increase its high-tech research and development efforts. According to the company announcement, at present, the company's sixth-generation IGBT products have been successfully developed and received good application feedback in the fields of new energy vehicles, charging piles, and inverter home appliances. We believe that the company has leading technology and outstanding manufacturing technology in the field of new energy vehicle IGBTs, and is expected to achieve a domestic breakthrough in the field of high-end power semiconductors and open up room for growth. The company's management continues to be optimized, and equity incentives demonstrate confidence. The company further promotes the use and management of business divisions to improve the company's overall operating performance. Through project management, the company drives product and process technology upgrades, equipment optimization and transformation of all divisions, and continuously enhances organizational competitiveness. In November 2017, the company released the equity incentive plan (draft). We believe that equity incentives are conducive to improving the corporate governance structure, strengthening incentives for the company's management and technical backbone, and beneficial to the long-term development of the company. Investment advice: Buy-A investment rating. We expect the company's net profit from 2017 to 2019 to be 93 million, 141 million, and 190 million yuan respectively. The net profit growth rates are 128.0%, 51.9%, and 35.0%, respectively, and the corresponding EPS is 0.13, 0.19, and 0.26 yuan/share, respectively. Considering the trend of industry resource integration, the company has strong endogenous and epitaxial development expectations; the military/new energy industry needs an urgent breakthrough, and high value-added products continue to optimize profitability. In view of high future performance growth and potential breakthroughs to the industry's valuation center, 56 times PE was given in 2018, with a target price of 10.67 yuan for 6 months. Risk warning: With the macroeconomic downturn, product expansion in new application areas falls short of expectations.