There was a marked increase in performance. In the first half of 2016, the company achieved operating income of 515.5933 million yuan, an increase of 31.39% over the previous year; net profit of 63.1716 million yuan, an increase of 36.91% over the previous year; net profit after deduction of 57.382 million yuan, an increase of 157.02% over the previous year. The increase in operating income was mainly due to increased market development efforts in the current period and the merger of Shanghai Science and Technology Company, which led to a year-on-year increase in revenue from the IT business and environmental protection business. The increase in net profit was mainly due to: (1) the environmental protection industry turned a loss into a profit, and (2) the sales revenue of high-margin software services and software products increased significantly over the same period last year. The software service business and environmental protection business are growing rapidly. By product, (1) software service revenue was 295.213,600 yuan, up 31.00% year on year, gross profit margin 72.63%, down 5.08 percentage points; (2) environmental product revenue was 105.6618 million yuan, up 38.33% year on year, gross profit margin 32.62%, up 18.43 percentage points year on year; (3) hardware product sales revenue was 52.0769 million yuan, down 4.75% year on year, gross profit margin 0.21%, up 0.02 percentage points year on year; (4) software sales revenue developed by ourselves 386.829 million yuan, up 118.20% year on year, gross profit margin 100%; (5) System maintenance was 15.7804 million yuan, up 19.63% year on year, gross margin was 100.00%. The company's gross margin in the software service business and environmental protection business is high, and revenue is growing rapidly. Financial technology products continue to innovate, and the financial IT industry chain continues to improve. (1) Financial technology product level: 1) The company's traditional business, such as process banking, electronic banking, video risk control business, insurance business, call center, etc., continues to maintain its leading market position and is constantly introducing new ones. 2) In the field of risk management, the first company introduced a comprehensive risk management system, integrated a comprehensive pricing system, balance and liability systems, etc., with a high bid rate and strong market demand. (2) Financial technology service level: The company is committed to building an IT cloud service platform for consumer finance, and the new microfinance O2O aggregation platform under the subsidiary Kejiang was launched to innovate financial scenarios covering consumer services; the company funded the establishment of Hangzhou Xinyada Fantai Technology Co., Ltd., which will provide technical services for consumer finance. (3) In terms of industrial chain development: The company plans to acquire 80% of Jinwang Antai's shares for 960 million yuan. The company is expected to use Jinwang Antai's customer base and data docking capabilities, combine its own supply chain finance IT solution capabilities and cooperative financial institution resources, and form a financing, trading, and credit reporting ecosystem through the integration of enterprises in the supply chain. Increase capital in Quchain Technology and increase blockchain technology research and development. The company announced that the company plans to invest 5 million yuan, Zhejiang University Wangxin, and Zhejiang Junbao to jointly invest in Hangzhou Quchain Technology. After the capital increase, the company will hold 10% of Fun Chain Technology's shares. Qulink Technology was founded in 2016. The company focuses on the research and development of the underlying blockchain technology, with core personnel from Zhejiang University's Blockchain Laboratory as co-founders. The core team all have doctorate degrees. Currently, the company is mainly engaged in the development and application of blockchain underlying technology platforms. The company is expected to increase capital and invest in Quchain Technology, strengthen cooperation with Quchain Technology on the blockchain underlying technology platform, accelerate the company's progress in using blockchain technology to provide application solutions for the financial industry, and promote the company's business development in fintech. The environmental protection business is getting better, and the market potential continues to grow. Tianming Environmental Protection, a subsidiary of the company, is a pioneer and leader of rotating plate electric dust collectors in China, and an active proponent of ultra-clean emissions from wet dust collectors. During the reporting period, (1) Tianming Environmental Protection provided integrated solutions and services for smoke and dust emission enterprises. The main products included dust collector bodies, high-frequency power supplies, electronic control equipment, and optimized management software; (2) Tianming Environmental insisted on team building and incentive mechanisms to further enhance marketing capabilities; (3) the contract signing situation was good, and contract quality generally improved, achieving operating income of 110.2913 million yuan and net profit of 10.39 million yuan. Profit forecasting and valuation. Assuming that Jinwang Antai is consolidated at the end of 2016, we predict that the company's net profit from 2016 to 2018 will be 164 million yuan, 271 million yuan, and 334 million yuan respectively. The EPS after considering the dilution of additional share capital will be 0.34 yuan, 0.56 yuan, and 0.69 yuan, respectively, with an average compound annual growth rate of 40.2% over the next three years. Referring to comparable companies in the same industry, the company was given 55 times the dynamic PE in 2017, with a target price of 30.80 yuan for 6 months. Maintain a “buy” rating. Risk warning. The expansion of supply chain finance applications fell short of expectations; acquisition integration fell short of expectations.