Leading modified plastics, the business trend is diversifying. The company is one of the leading enterprises in the field of plastics modified with new polymer materials in China. The main business of modified plastics is mainly used in the fields of wires and cables, energy-saving lamps, electronics, etc. In recent years, with the rapid development of intelligent electronic products and the strong spread of 3D printing technology, the company is based on its main business, actively expanding upstream and downstream industries, entering the fields of LED optoelectronic materials, CNC metal precision structural parts, and 3D printing materials, and the company's business is diversifying. By optimizing the structure of traditional modified plastic products, profitability is expected to increase dramatically. Against an unfavorable macro backdrop such as the slowdown in domestic economic growth, the company's traditional modified plastics business bucked the trend. Through methods such as developing new products and improving the formulation of original products, the gross profit margin of the company's plastic products increased by 17.77% in the first half of 2016, an increase of more than 4 percentage points compared to 2014. Benefiting from the release of production capacity, the company's production and sales of modified plastic products continued to grow. In 2016, production and sales both exceeded 60,000 tons, up 18% and 15.34% year on year, respectively, and achieved revenue of 550 million yuan, an increase of 9.73% over the previous year. At the same time, the company's product structure continued to be optimized, new vehicles were added to the downstream sector, and the share of high-margin products was increased. In 2015-1H2016, the revenue growth rate of toughened materials and plastic alloy products was more than 50% over the same period last year. In the future, the company will continue to favor products with high gross margin in the modified plastics business, and profitability is expected to increase dramatically. It wholly-owned Xingke Electronics shares the burgeoning dividends of the CNC industry. The company acquired Xingke Electronics through a combination of stock issuance and cash payment, making it a wholly-owned subsidiary of the company. Xingke Electronics promised to achieve net profit of not less than 200 million yuan, 240 million yuan, and 290 million yuan respectively in 16-18. Xingke Electronics is one of the few CNC metal precision structural parts developers with full-process processing capabilities in China. It has a full range of process capabilities such as CNC processing, metal grinding, laser engraving, T-processing, nano-injection, metal sandblasting, and anodizing. It has a remarkable competitive advantage and is in a leading position in the industry. In 2016, Xingke Electronics had impressive performance. In the first three quarters, it achieved revenue of 1,299 million yuan and net profit of 306 million yuan, up 154% and 503% respectively over 2015. Among them, net profit has far exceeded performance promises. CNC is mainly used for metal exterior parts of consumer electronics products such as smart phones, computers, and wearable devices. As brands such as Apple, Samsung, Huawei, ZTE, and OPPO have adopted metal cases, the CNC market has ushered in a period of rapid development. It is estimated that the CNC market space will exceed 20 billion US dollars in 2017. After the acquisition is completed, the company will further strengthen its competitiveness in the CNC field and share the explosive dividends of the CNC industry. Together with the traditional modified plastics business, the CNC business will become the twin engines of the company's future performance growth. Accelerate customer expansion and be optimistic about the company's long-term performance growth. Since this year, the company has been actively expanding new customers, and the customer diversification work is progressing smoothly. Currently, in addition to the original main customer LeTV, it has also successfully entered the supply chains of well-known manufacturers such as Xiaomi and OPPO, and has obtained customer certifications and orders for TCL, Meitu, and Hammer phones. At the same time, the company also leverages its experience and technological advantages in the smartphone market to expand into the tablet field and further enrich the customer structure. We believe that although the slowdown in LeTV orders has put pressure on the short-term performance of the company's CNC business, the company's reduction in dependence on a single customer and the shift to a multi-customer structure is more beneficial to future development, and we continue to be optimistic about the rapid growth of the company's CNC business performance in the medium to long term.