2016 Interim Report: The company's performance in the first half of the year reversed year-on-year losses. The company achieved revenue of 9.353 billion yuan in the first half of the year, a year-on-year decrease of 22.79%; net profit attributable to the parent company of 339 million yuan, a year-on-year reversal of loss; basic earnings per share of 0.13 yuan, up 0.24 yuan from the previous year; and the weighted average return on net assets was 3.05%, up 6.40 percentage points year on year. Among them, the second quarter achieved revenue of 5.00 billion yuan, a year-on-year increase of 14.86% and a year-on-year decrease of 12.67%; net profit attributable to the parent company was 227 million yuan, up 103.99% from the previous year, reversing losses from the previous year; and basic earnings per share of 0.09 yuan, up 0.05 yuan from the previous month and 0.18 yuan from the previous year. Implementing major asset restructuring, completing the transformation and upgrading in the first half of the year, the company completed major asset restructuring, placing out 100% of Ningbo Steel's shares, 87.54% of Ziguang Environmental Protection's shares, 97% of renewable resources, and 100% of renewable technology. At the same time, capital was raised for asset environmental protection sewage treatment projects, steel energy saving and environmental protection projects, and metal trading e-commerce platform construction projects. Through this restructuring, the company was transformed and upgraded to a “steel-based industry and capital platform covering environmental protection, metal trading e-commerce platforms, and renewable resources businesses.” The improvement in the steel industry and strong injection of high-quality assets helped the company turn losses into profits. As the company implemented asset restructuring, Ningbo Steel, Ziguang Environmental Protection, Renewable Resources, and Renewable Technology were included in the consolidated scope of the interim report, and the assets placed were no longer included, and the relevant financial data changed greatly. The company's operating income for the first half of the year fell 22.79% year on year, operating costs fell 27.80% year on year, and net profit reversed losses year on year. Subsidiaries such as Ningbo Steel and Ziguang Environmental Protection contributed significantly to net profit. Benefiting from improvements in the steel industry and the injection of high-quality assets, the gross margin of the company's ferrous metal smelting business was 14.04%, an increase of 14.02 percentage points over the previous year. With “steel+environmental protection” two-wheel drive, the main business advantage is obvious. The company has injected high-quality assets, and its core competitiveness has been significantly enhanced. First, Ningbo Iron and Steel is close to Beilun Port. The bulk of the raw fuel it procures is directly unloaded to its own feedlot through the Beilun Port process, so it has an unreplicated logistics cost advantage in raw fuel transportation. Furthermore, more than 70% of Ninggang's products are sold within Zhejiang Province. The sales radius is small, the delivery cycle is short, and the location advantage is obvious. Second, the scope of Ziguang's environmental protection business covers various fields such as municipal water supply, urban sewage treatment, landfill leachate treatment, and river management. It has a mature operation system in every business sector, which can provide a complete management plan for the government and enterprise users, and has established an environmental protection industry chain integrating investment, consulting, design, engineering, and operation. At the same time, the company has mastered cutting-edge technology in various fields such as treatment of high-concentration industrial wastewater, advanced treatment and reuse of heavy industrial sewage, light industry sewage treatment, and urban sewage treatment. The results of the transformation and upgrading are beginning to show. Maintaining the “increase in holdings” rating in the first half of the year, the company successfully completed major asset restructuring. By investing in high-quality assets and loss-making assets, net profit was reversed year over year, and new assets have a strong competitive advantage in the market, so it is expected that the company's profits will increase in the future. Maintaining the company's “increased holdings” rating, the 2016-2018 EPS is expected to be 0.26, 0.30, and 0.36 yuan respectively. Risk warning: changes in the economic situation; fluctuations in raw material costs and product prices; corporate management governance, etc.