Revenue is growing rapidly and performance is slightly lower than expected. In the first half of the year, the company achieved revenue of 217 million yuan, an increase of 35.33% over the same period last year; net profit of 14.87 million yuan, an increase of 7.99% over the same period last year; and earnings per share of 0.15 yuan, slightly lower than expected. The increase in sales expenses by 80.80% and the increase in bad accounts receivable by 5.26 million yuan in the current period led to a lower increase in net profit than income growth.

The traditional advantage business electrical transmission continues to grow rapidly, with an increase of 94.32% compared with the same period last year, while the revenue of industrial computer control systems and industrial special detection and control instruments shrinks, which is consistent with the company's development strategy and business focus.

The newly signed contract is at its best in history. Due to the strong demand of the industry and the company's efforts to increase product sales, the company's newly signed contracts are at the best level in history. The company's inventory and accounts received in advance reached 475 million yuan and 575 million yuan respectively, reaching the highest level in history. The large amount of inventory and accounts received in advance shows that there are a lot of new orders and outstanding orders in the execution of the company.

The establishment of a production base in Zhuozhou will solve the capacity bottleneck. The new base is expected to be completed in May 2008, and the capacity of the new base is twice that of the current headquarters, which will greatly alleviate the pressure of the company's shortage of production sites.

Maintain a "cautiously recommended" investment rating. The company's product market demand is strong, the order is full, will continue to grow at a high speed in the next few years. Earnings per share in 07-09 are expected to be 0.35, 0.48 and 0.65 yuan respectively. Compared with similar companies, we give the company a relative valuation of 35 times in 2008. The stock price is still low and the original rating is maintained.