Dynamic matters The company released its 2013 semi-annual report. In the first half of the year, the company achieved operating income of 327 million yuan, an increase of 0.83% over the previous year, and net profit attributable to shareholders of listed companies of 95789 million yuan, an increase of 0.18% over the previous year. Earnings per share are $0.03. The main points of view The performance was the same as the same period last year. In the first half of the year, the company achieved operating income of 327 million yuan, an increase of 0.83% over the previous year; net profit of 957.89 million yuan, an increase of 0.18% over the previous year; revenue and net profit were the same as the previous year. Both water sales volume and sewage treatment volume increased slightly, and the pipeline installation business declined, so the company's revenue and profit remained the same as last year. In the first half of the year, the company sold 11.721 million tons of water, an increase of 2.34% over the previous year; achieved a sewage treatment volume of 26.92 million tons, an increase of 10.53% over the previous year. Business volume increased steadily. In the first half of the year, revenue was 238 million yuan, up 2.57% year on year; cost was 127 million yuan, up 4.75% year on year; and gross profit margin was 46.56%, down 1.11 percentage points from the same period last year. Another major pipeline installation business achieved revenue of 61.3945 million yuan, a year-on-year decrease of 3.98%; a cost of 479.686 million yuan, a year-on-year increase of 2.11%; and a gross profit margin of 21.87%, a year-on-year decrease of 4.66 percentage points. In addition, housing sales, materials and accessories sales, and hotel business revenue all declined significantly, but since revenue accounted for a relatively small share, the impact on the company was small. Investment income fell 90%, and non-operating income increased 30%. In the first half of the year, the company achieved investment income of 676,500 yuan, down 91.01% from the same period last year, mainly due to a decrease in the income of the invested unit compared to the same period last year. Among them, Paradise Silicon Valley contributed 1,488 million yuan in investment income, a decrease of 83.54% from the same period last year. Venture capital companies' profits fell significantly, and their contribution to the company's performance fell sharply; in addition, losses from Yili Electric Power and Dayu Water Resources increased, and Hetian Hydro's losses decreased. Non-operating income was 6.4954 million yuan, an increase of 36.49% over the same period last year, mainly due to the increase in government subsidies received in the first half of the year compared to the same period last year. Investment advice: Within the next six months, give a “neutral” rating. We forecast that the company's operating income will increase by 0.82% and 1.32% respectively in 2013-2014, and that net profit attributable to the parent company will achieve annual increases of -1.33% and 12.03%. The corresponding diluted earnings per share are 0.06 yuan and 0.07 yuan, and the corresponding dynamic price-earnings ratios are 121.82 times and 108.73 times, and the company's valuation is high. We believe that the company's revenue mainly comes from water supply and sewage treatment, and that growth is relatively stable, giving the company a “neutral” rating.