The performance increase of 107.48% in the semi-annual report is in line with expectations, and the interim report is expected to increase by 100%-150%; the company released the 2016 semi-annual report. The company achieved operating income of 356 million yuan during the reporting period, an increase of 33.57% over the previous year; and realized net profit attributable to the parent company of 69 million yuan, an increase of 107.48% over the previous year. The corresponding EPS is 0.15 yuan. Among them, revenue was 245 million yuan in the second quarter, up 65.96% year on year and 120.78% month on month; net profit attributable to parent company was 50 million yuan, up 174.13% year on year and 155.03% month on month. The corresponding EPS for the second quarter was 0.11 yuan. The company's performance is in line with expectations. At the same time, the company announced a semi-annual profit distribution plan to transfer 30 shares for every 10 shares to all shareholders using the capital reserve fund. The company expects a profit of 0.85 to 107 million yuan in January-September, an increase of 100%-150% over the previous year. The photovoltaic business led to growth; gross margin declined year-on-year: During the reporting period, the company's revenue and profit increased by 33.57% and 107.48%, respectively, over the same period, mainly due to the sharp increase in photovoltaic revenue. By business: 1) Photovoltaic power generation achieved revenue of 29 million yuan, a year-on-year increase of 503.40%, and a gross profit margin of 63.40%, a year-on-year decrease of 17.19%. Meanwhile, the photovoltaic equipment business contributed 105 million yuan in revenue, with a gross profit margin of 11.37%. The photovoltaic business is the main driver of the company's performance growth. Up to now, the company has accumulated 120 MW of grid-connected photovoltaic power plants, and 421.47 MW of grid-connected and ongoing projects. The projects are all located in Anhui, Zhejiang and other places. The consumption situation is good, and will contribute significantly to the company's performance in the future. 2) The revenue of the traditional fine chemical business was 184 million yuan, a decrease of 4.68 percentage points, and gross margin increased 4.85% to 39.75%. 3) The performance of the new materials and indoor environmental treatment industries both declined, achieving revenue of 27 million yuan and 512 million yuan respectively, down 37.90% and 51.64% from the previous year; gross margin decreased by 8.27% and increased by 4.03% to 19.21% and 66.55%, respectively. In terms of profitability, the company's comprehensive gross profit margin and net profit margin fell 4.53 year on year and increased 6.91 percentage points to 32.60% and 19.39%, respectively. The increase in profitability was mainly due to non-recurring profit and loss projects contributing 39 million yuan. The company's expense ratio declined in the first half of the year, and inventory and accounts receivable turnover accelerated: the company's 2016 H1 sales, management, and financial expenses were 24 million yuan, 29 million yuan, and 22 million yuan respectively, up 9.53% year on year, down 5.02%, and 195.59%, respectively. The company's 2016 H1 period expense ratio decreased by 1.37 percentage points to 21.06%. Among them, sales, management, and finance expense ratios decreased by 1.51%, 3.25, and increased by 3.39 percentage points from 2015 H1 to 6.87%, 8.00%, and 6.19%, respectively. The company's 2016 H1 advance payment was 60 million yuan, which is basically the same as at the beginning of the year; the cash flow from operating activities during the same period was 315 million yuan, compared to 229 million yuan for the same period last year. Inventory at the end of the period was 67 million yuan, a slight increase from the beginning of the period; inventory turnover days were 48.53 days, a decrease of 28.48 days; accounts receivable was 251 million yuan, up 53.64% from the beginning of the period; and accounts receivable turnover days were 104.5 days, a decrease of 3 days from the previous year. Rapid deployment in new fields such as energy storage, new energy vehicles, and charging stations: The company recently started with new energy vehicle charging facilities and energy storage to improve the company's energy internet layout: 1) acquired 20% of the shares of Charging Easy Technology Company and entered the NEV charging field for the first time; 2) acquired 90% of the shares of Shenzhen Hongxu New Energy Vehicle Operating Company and officially entered the NEV leasing market; 3) increased its capital to invest in 20% of Letubao Technology's shares. The partner has the Internet bus travel customization platform “Tuk Tuk Bus”. 4) Acquire 8% of Beijing Baineng's shares, hold 51.078% of Baineng's shares, develop zinc-bromine liquid flow battery technology, and lay out new fields such as intelligent microgrids, energy storage power banks, and photovoltaic power plant operation and maintenance. These new business areas will drive the growth of the company's performance, and will not preempt the company's future development and transformation. Investment suggestions: The company's net profit attributable to the parent company in 2016-2018 is estimated to be 148 million yuan, 254 million yuan and 345 million yuan respectively, up 189%, 72%, and 36% year-on-year respectively. EPS is 0.31 yuan, 0.54 yuan and 0.73 yuan respectively, giving the company an investment rating of “increased holdings”. Risk warning: Ground-based power plant registration or power generation capacity falls short of expectations; distributed project progress falls short of expectations; financing falls short of expectations; traditional business recovery falls short of expectations; and new business layout falls short of expectations.