Event: The company released the 2014 interim report: In the first half of 2014, the company achieved operating income of 1,760 million yuan, a year-on-year increase of 2.08%, and realized net profit attributable to shareholders of listed companies of 61.84 million yuan, a year-on-year decrease of 23.63%, and earnings per share of 0.05 yuan. Comment: The strategic reduction of trade business has led to a decline in revenue, and the good development of financial electronics and communication electronics achieved operating income of 1.157 billion yuan, a year-on-year decrease of 9.21% in the 2nd quarter of 2014. The decline in revenue is mainly due to the strategic reduction in trade business (revenue 700 million, down 20% year on year). Actual corporate financial electronic business, digital cluster business developed well: 1) The financial electronics business benefited from the advancement of the localization process and achieved revenue of 360 million yuan, an increase of 34.73% over the previous year. Orders are expected to increase 50% year over year; the company became the largest industrial and commercial bank of China in the first half of the year ATM machine customers have received a large CRS order from Everbright Bank, and are expected to continue to break through in the future. 2) Communications and electronics benefited from the development of the private network market, and the switching network added the ZTE Huawei project, achieving revenue of 715 million yuan, an increase of 11.96% over the previous year. In the first half of the year, the company won the bid for the 350M project of the Dalian Public Security Bureau and the PDT project of the Changchun Public Security Bureau, laying the foundation for subsequent PDT digital cluster communication projects, breaking through terminals, and achieving small-batch trial production of PDT handsets. We believe that in the second half of the year, as the localization of financial electronics continues to advance, and domestic public security networks, subway networks, and government affairs networks continue to bid, the company's main revenue is expected to grow at an accelerated pace (excluding trade). Profit forecast: Looking at 2014, the company's digital cluster business began to explode, the financial electronics business grew rapidly, and the company's equity incentive exercise conditions required the company's 14-year performance to increase by more than 52% year on year. Therefore, we judge that the company's 14-year performance will explode and increase by more than 60%. Looking at the medium to long term, we are optimistic that the company will benefit from the large-scale construction of the public security network and the construction of financial electronic solutions. We maintain the 14-16 EPS at 0.26 yuan, 0.39 yuan, and 0.50 yuan. We continue to pay attention to the implementation of the public security network, reaffirm the “increase in holdings” rating, and suggest intervening on dips. Risk warning: the promotion of the public security network fell short of expectations, and competition in the industry was fierce