Event: The company released its 2016 mid-year report. In the first half of 2016, the company achieved operating income of 826 million yuan, an increase of 67.48% over the previous year; realized a total profit of 151 million yuan, an increase of 240.07% over the previous year; and net profit attributable to owners of the parent company was 141 million yuan, an increase of 274.39% over the previous year. During the reporting period, the company's main business operated well, various businesses progressed steadily, and the contract amount continued to increase. According to the quarterly data, the company's quarterly revenue was 512 million yuan, up 77.72% year on year; realized total profit of 97.841 million yuan, up 216.32% year on year; and net profit attributable to owners of parent company was 993.831 million yuan, up 272.06% year on year. During the reporting period, the company's various businesses operated well, and R&D of various technologies and product promotion progressed in an orderly manner: 1) The company's intelligent conference orders increased steadily, and market development progressed smoothly. During the reporting period, the company actively promoted market development for intelligent conference products, focusing on government and military customers, vertically expanding customers at the city and county levels, and expanding the international market. Furthermore, during the reporting period, the company's newly deployed video conferencing cloud has already reaped initial benefits. We are optimistic about the company's market development and channel layout in the field of intelligent meetings; 2) During the reporting period, the company's smart city business developed healthily, and sales revenue increased by 65.73% year-on-year. During the reporting period, the company reached cooperation agreements with Lishui, Weinan, and Quanzhou, and won bids for a number of major projects. We believe that the company currently has sufficient orders, and there is high certainty about future performance growth; 3) The company's big data business is growing rapidly and has won bids for a series of major projects. During the reporting period, the company won bids for the Beijing electronic port platform upgrade and transformation of the Beijing electronic port platform of the Beijing Municipal People's Government Port Office, the National Development and Reform Commission's Internet big data analysis system, software procurement, development and system integration project, the Chongqing Municipal Public Security Bureau's Yuzhong District “Three Houses and One Team” information and communication construction project, the National Information Center National Legal Entity Information Resource Library (Phase I) and the first phase of the social credit information sharing and exchange pilot project, Nanyang Social Credit System Platform Construction Project, National Development and Reform Commission Internet Big Data Analysis System Project, etc.; 4) The company's online education sector Its competitiveness continues to increase. During the reporting period, the company's Internet education section launched a mechanical cloud project. We believe that the product positioning is highly compatible with market demand, and we are optimistic that the performance of this business will grow. During the reporting period, the comprehensive profit margin was at a high level, and the company's profitability was good. In the first half of 2016, the company's consolidated gross margin was 42.46%, up 3.1 percentage points year on year; the company's consolidated gross margin for the second quarter was 39.28%, down 0.46 percentage points year on year. We believe that the future growth of the company's four major business segments is highly certain. It is expected that sales growth in the company's new business and new products will drive the comprehensive profit margin to continue to rise over a long period of time. The company's expenses were well controlled during the period, and R&D expenses were kept at a reasonable level. During the reporting period, the company's period expense ratio was 24.06%, down 2.15 percentage points year on year; among them, the cumulative sales expense ratio at the beginning of the year was 6.12%, down 1.2 percentage points year on year; and the cumulative management expense rate at the beginning of the year was 16.26%, up 0.33 percentage points year on year. During the reporting period, the company's R&D expenses increased by 82.87% year on year. We believe that the company's expenses have maintained a reasonable scale and that the expenses for the period are well controlled. We are optimistic that the company's R&D investment and commercialization of various R&D activities will provide new impetus for performance growth. For the first time, we gave the company an investment rating of “increased holdings”. We estimate that the company's operating income for 2016/2017/2018 was 2,655 million yuan, 3.719 billion yuan and 4.968 billion yuan respectively; net profit attributable to the parent company of the listed company was 593 million yuan, 851 million yuan and 1,164 million yuan respectively; earnings per share were 0.41 yuan, 0.59 yuan and 0.81 yuan respectively; and the corresponding dynamic PE was 30.15 times, 20.95 times and 15.26 times, respectively. We are optimistic about the company's deep accumulation in technology and channels, and the room for continued growth in the company's four major business segments. For the first time, the company was given an investment rating of “increased holdings”. Risk warning: Downstream demand has fluctuated more than expected.