The 2017 performance was in line with expectations. The company announced its 2017 annual report. In 2017, it achieved operating income of 726 million yuan (+119%), net profit of 173 million yuan (+173%), net profit of 173 million yuan (+173%), and non-net profit of 165 million yuan (+192%). The corresponding EPS was 1.70 yuan. The performance was in line with our expectations. The reason for the sharp increase in the company's performance was the release of King Kong Wire's production capacity in the fund-raising project, which achieved revenue of 356 million yuan (+317%). We are optimistic that the company's 18-year magnetic cable business will continue to gain strength. Polar ear and high-voltage wires are expected to enter a period of rapid growth. The profit forecast has been raised, and the target price has been raised to 121.04-128.16 yuan to maintain the “increase in holdings” rating. The company's 2017 gold steel wire revenue contributed half of Jiangshan. In 2017, the company's diamond wire sales revenue reached 356 million yuan, accounting for 49% of total revenue, an increase of 23.29 pct over 2016, becoming the company's main source of profit and performance growth point. The shipment volume in 2017 reached 2.19 million kilometers, with an average price of 162 yuan/km. Laminated wire, conductors, and wireless charging coil products achieved sales revenue of 500 million yuan, 265 million yuan and 0.2 billion yuan respectively, up 68.65%, 27.27%, and 238.78% respectively from 2016, mainly due to material upgrades and new product launches. The high-margin diamond wire led to an increase in overall gross margin of 5.78 pct, and the company's overall gross margin reached 41.46%, up 5.78 pct over the previous year. Mainly, the gross margin of diamond wire and laminated wire increased by 9.13 pct and 4.39 pct, respectively. The increase in the gross margin of the King Kong Line is mainly due to technical improvements to increase production capacity and yield. The cost per kilometer of the King Kong Line dropped from 115.37 yuan in 2016 to 71.02 yuan. Operating cash flow has deteriorated, and prepayments receivable have increased dramatically. Operating cash flow has changed from positive to negative. The net amount was -0.3 billion yuan, a decrease of 189% over the previous year. Accounts receivable reached 353 million yuan, an increase of 128% over 2016; on the other hand, in order to meet customer demand, the company purchased a large amount of raw materials for diamond wire, resulting in prepaid accounts reaching 79 million yuan. Our judgment is that the company may have adopted a more relaxed sales credit policy in order to seize market share. King Kong Line continues to be prosperous. The speed of expansion is faster than that of peer company management and strong execution, and the progress of production capacity expansion has surpassed that of peers. With the completion of the technical reform of King Kong Wire, the annual production capacity has increased to 8 million kilometers, and high performance growth in 2018 can be expected. Wireless coils have been supplying Apple iWatch since '15, and iPhone is expected to be supplied in '18. New energy vehicle pole ear products and high-voltage wiring harnesses are in the early stages of introduction. It is expected that in the medium to long term, it will be a new growth point for the company's performance. Raise the profit forecast and maintain the “increase in holdings” rating. Considering that the production capacity of the 2018 Gold Steel Line has expanded to 8 million kilometers (previously 6 million kilometers), and the company's profit forecast was raised, the company's 18-20 revenue is estimated to be 15.89/20.17/2,477 billion yuan, and net profit is 3.63/4.43/43/463 billion yuan, corresponding to EPS of 3.56/4.34/4.54 yuan (the original 18-19 forecast EPS is 3.06 and 3.31 yuan). Given the company's thin diamond wire and strong competitiveness, The high performance growth rate and R&D advantages of the ultra-fine process platform and new product reserves gave 34-36 times PE in 2018, corresponding to the target price of 121.04-128.16 yuan, maintaining the “increased holding” rating. Risk warning: the risk of high customer concentration; the risk of a sharp drop in prices due to the 18-year oversupply of King Kong Wire; the risk of rising labor costs of raw materials; the risk of intense market competition and unsuccessful market expansion; and the risk of production capacity falling short of expectations.