Event: The company announced its 2015 semi-annual report, with revenue of 685 million yuan, an increase of 6.27% over the previous year, and net profit of 119 million yuan, an increase of -57.46% over the previous year. The performance base for the same period last year was high, resulting in a sharp decline in net profit over the same period last year. In the first half of 2014, the company's financial IC card shipments increased well and the unit price was high, making the overall performance good. The growth rate of the financial IC card industry is slowing down, and the decline in unit prices is dragging down the company's performance. (1) Currently, financial IC cards account for about 75% of the company's total revenue, which is the company's most important source of revenue; (2) Entering 2015, the penetration rate of financial IC cards in newly issued bank cards has reached 100%, while the number of cards issued in China's bank card market has increased by about 20% year on year. The overall growth rate of the industry is expected to slow down in 2015 and 16; (3) With the increase in new market entrants, the unit price of financial IC cards will drop by about 15% this year, and gross margin will decline; (4) We expect the company to ship about 160 million financial IC cards in 2015. Benefiting from “business reform and growth,” shipments in the tax control market have surged; mPOS is officially mass-produced, and the market prospects are worth looking forward to. (1) As some regional life service industries are included in the scope of business reform and the new demand brought about by the implementation of value-added tax invoicing system upgrades, demand in the tax control market surged in 2015. In the future, as more regional services, construction, real estate, and financial insurance industries are included in the scope of “business change and increase”, the tax control market is expected to maintain rapid growth in the next 2 years; (2) We expect the company to ship about 500,000 units in 15 years; (3) mPOS has met the rigid demand for payment, portability, and intelligent management for small and micro merchants. Currently, the industry's shipments are growing very fast. And China has 60 million Small, medium and micro merchants need this kind of service. We expect this will be a blue ocean market within the next 2 years, and at the same time, data services based on micro, small and medium-sized merchants will be a larger market. We are optimistic about the company's expansion in this field. The “education cloud” leads service transformation, and the market valuation logic should change. (1) The company's smart card business is no longer focused; various innovative businesses are the key to valuation. The company's current strategy is to continuously transfuse blood from the smart card business to innovative businesses such as Education Cloud, O2O smart retail, TEE, etc., and promote the company's transformation from “product” to “service”, and the company is expected to usher in an inflection point in business structure optimization; (2) As of March 2015, 80% of schools across the country have achieved Internet access, and the next 2 years will be a critical window for the bidding and construction of education cloud platforms in various regions. The company is the absolute leader in this market; (3) In June 2015, the company decided to invest 760 million yuan in the education cloud business, and we are firmly optimistic about the company's investment in the education cloud business. Expansion. Maintain a “buy” rating. We expect Tianyu Information's 2015-2017 sales revenue to be 1,549/19.12/2,222 billion yuan, corresponding net profit of 0.57/1.21/192 million yuan, and corresponding EPS of 0.13/0.28/0.45 yuan, respectively. Considering the slowdown in the growth rate of the company's main financial IC card market, the company's target price for 12 months was lowered to 42 yuan, corresponding to 150 times PE in 2016, maintaining the “buy” rating. Risk factors: Further decline in financial IC card shipments and unit prices; systemic risk.