Highlights of the report describe the interim report released by Accumulation Electronics. In the first half of 2016, the company achieved total operating revenue of 522 million yuan, an increase of 28.31% over the previous year; net profit attributable to the parent company was 20.07 million yuan, an increase of 2.75% over the same period last year. The growth rate of this semi-annual report is within the previous performance forecast range, which is basically in line with market expectations. At the same time, the company announced that it expects to achieve net profit of 7228 to 86.74 million in January-September, an increase of 0-20% over the previous year. The increase in the incident review fee rate dragged down profit growth, and the growth rate improved markedly in the second quarter. The company achieved net profit of 54.36 million yuan in April-June, an increase of 84.04% over the previous year, which is a significant improvement over the first quarter's operations. The company's profit growth rate in the first half of the year was lower than revenue, mainly due to the 6 percentage point increase in the cost ratio during the period. The power automation business achieved superindustry growth, and the development of the utility business accelerated. Although the capacity of the State Grid Corporation's recruitment market shrank in the first half of the year, and the number of tenders declined, the company optimized its marketing organization structure, actively expanded the off-grid market, and successfully achieved a 21.71% year-on-year increase in power automation revenue; in the utility sector, the company achieved revenue of 97 million yuan in the first half of the year, an increase of 65.65% over the previous year. However, due to the increase in the share of sales of metering hardware products, the gross margin of the automation business fell 6.65%. Electricity sales companies entered the catalogue, and military investment continued to follow suit. On July 5, Guangdong officially announced the second batch of electricity sales company catalogues. Shenzhen Huijie Electric Energy Sales Co., Ltd., in which the company participated, was successfully included, marking the official launch of the company's electricity sales business. In the future, it is expected that the company will use smart metering and smart energy public cloud platforms and resources accumulated in the early stages to quickly develop the user-side electricity sales and comprehensive energy service market through demand-side energy big data and user service portals. In addition, the company and Beijing Jiuyuan jointly established the “Jiucheng Military Industry M&A Fund” last year, with a total fund size of 1.5 billion yuan, which is mainly used to invest in the field of military information technology. Jicheng Electronics has core technology and industrial experience in the field of electronic information. Beijing Jiuyuan is a subsidiary of China's only nuclear weapons research and production unit. It has accumulated a large amount of military resources and reserves for military to civilian projects, and the two sides have good military and civilian integration and complementarity. Actively promote additional generation plans, and steadily expand the micro energy grid business. On May 25, Jicheng Electronics announced an additional plan (second revised draft). It plans to issue no more than 50 million shares, with a total capital raised of no more than 900 million yuan. Of this, 427 million yuan is to be invested in demand-side micro-energy grid operation and service projects, and 223 million yuan is planned to be invested in smart grid automation system upgrade research and development projects. Currently, the plan has been accepted by the Securities Regulatory Commission. The company has successively signed cooperation agreements with the Yishui County Government in Shandong Province and the Yiwu County Government in Xinjiang to build regional micro-energy grid projects. In the future, it will use high-energy enterprises, public buildings, and industrial parks in these regions as pilot projects to build demand-side micro-energy grid projects in stages to actively and steadily expand the micro energy grid business. Without considering this increase, the company's net profit for 16-17 is estimated to be 16/196 million, respectively, corresponding to 38 times PE in 16, and maintaining the recommendation. Risk warning: industry competition intensifies; policy orientation changes; company performance falls short of expectations