Key investment points The company's performance for the first half of the year was once again below expectations: in the first half of 2012, the company completed sales revenue of 105.895 million yuan, a year-on-year decrease of 13.9%, and the company achieved total operating profit of 22.06 million yuan, a year-on-year decrease of 10.51%, of which net profit attributable to shareholders of listed companies was 18.633 million yuan, a year-on-year decrease of 9.7%, achieving basic earnings per share of 0.19 yuan. Of the company's main business revenue, the current sales revenue of HDS protection accounted for 56.32%, a significant decrease from 70.6% in the same period last year. Due to macroeconomic effects, more customers have adjusted the factors of this year's maintenance plans. The operating income of the company's main product, HDS protection, in this period decreased by 35.31% compared to the same period last year. This is the main reason for the decline in the company's main revenue from January to June 2011. Profitability was affected by the decline in high-margin business: the company's gross margin in the first half of the year reached 33.24%, a slight increase from 31.65% in the first quarter, and a significant decrease in gross margin level of 38.46% from the same period last year, mainly due to the decline in the company's HDS business, which has a high gross margin, which remained at a high level of 42.75% in the first half of this year. There was no significant progress in fund-raising projects: the company invested a total of 27.57 million yuan in capital raised during the reporting period, or 7.3% of the total capital raised by the station. The investment progress of the main fund-raising projects for metal protection projects and non-metal protection projects is less than 10%, and the progress of R&D center projects and network service systems is only 20%. We believe that the construction of the company's fund-raising projects is closely related to downstream demand, and the progress of fund-raising projects is bound to be slow in the current context of declining main business income. The company has a short operating cycle and is greatly affected by downstream: Currently, the main business of the company is engineering technology services, using production processes of accepting orders, procurement, and construction, but unlike ordinary engineering construction companies, it is mainly reflected in the short operating cycle of the company. Generally, the company will prepare a certain amount of construction materials one week to January in advance. After receiving an order, the company sends technicians to contact the outsourcing unit to dispatch laborers. The construction period is 7-10 days. The company generally takes 1-2 months from construction to completion inspection and revenue confirmation. The company has many orders but the individual amount is small, which determines that the company is less affected by the signing of a single order and is more affected by the boom in the downstream application industry. Company risk warning: risk of macroeconomic slowdown; risk of accounts receivable; risk of loss of core technical personnel. Profit forecast and valuation: We expect the company's EPS for 2012-2014 to be 0.53, 0.59, and 0.77 yuan/share, respectively. According to current stock prices, the corresponding price-earnings ratios are 20.3 times, 18.5 times, and 14 times, respectively, giving a “neutral” rating.