Performance growth was in line with expectations. Kangsheng Co., Ltd. announced its performance report for the third quarter of 2016. In the first half of the year, Kangsheng Co., Ltd. achieved operating income of 1,999 million yuan, a year-on-year growth rate of 29.19%, and net profit attributable to listed companies of 152 million yuan, an increase of 124.58% over the previous year. Benefiting from strong profitability, the financial leasing business contributed to profit growth, the refrigeration pipe business and the new energy parts business developed steadily, and the company's performance increased during the reporting period in line with previous expectations. With the gradual advancement of the company's ecological layout strategy for the entire NEV industry chain, the company's future revenue and profit will maintain a growing trend. Emerging businesses are growing strongly, and full-year performance growth can be expected. The financial leasing business has strong profitability, and is expected to contribute significantly to net profit throughout the year. We expect the profitability of the company's traditional refrigeration piping parts business to remain stable, contributing about 40 million yuan in net profit throughout the year; the core components business for new energy vehicles will maintain its growth momentum, contributing about 70 million yuan in net profit throughout the year; and the financial leasing business will develop rapidly. It is expected that the whole year will exceed expectations, contributing about 110 million yuan in net profit. The development of new energy vehicles has entered a new stage. The company's industrial chain layout will fully benefit from the company's external mergers and acquisitions and joint ventures, and further expand the NEV industry chain layout. New energy vehicle fraud checks have been implemented. With future subsidies declining, carbon emissions, and the implementation of a credit system for new energy vehicles, industrial development will enter a new stage of economies of scale and industrial integration, and high-quality automakers and core components (such as motors, electronic controls, and electric air conditioners) will achieve performance growth through product volume. The company has a deep layout of electric motor control and electric air conditioning for new energy vehicles, intervenes in financial leasing, joint venture power batteries, and hosts Zhongzhi new energy vehicles with overall asset injection expectations, forming a strong ecological closed loop of battery motor electronic control, vehicle manufacturing, and leasing operations. In the future, it will fully benefit from the new stage of development of the NEV industry. The company's future development will continue to improve. Maintaining the buying rating, we expect the company's net profit in 2016-2018 to be 220 million yuan/262 million/335 million yuan, EPS of 0.19 yuan/0.23 yuan/0.29 yuan, respectively, corresponding to the current stock price PE of 53.47X/42.33X/33.87X, respectively. We believe that the strategic goal of Kangsheng Co., Ltd. to transform the entire NEV industry chain is very clear. Considering that the majority shareholder Zhongzhi is injecting new energy vehicles, the company's future development will continue to improve. The target price will remain unchanged at 13-14 yuan, maintaining the “buy” rating. Risk warning: The company's NEV parts business performance falls short of expectations, Zhongzhi's NEV performance falls short of expectations, NEV and financial leasing industry policy risks.