Key investment points: The interim report is beautiful, and I am optimistic about the company's high growth in the future. On the evening of August 26, 2016, the company released its 2016 semi-annual report. From January to June 2016, the company achieved operating income of 845 million yuan (YOY 84.77%) and net profit to mother of 102 million yuan (389.61%). In the second quarter of 2016, the company completed the acquisition of Gold Shipping, which was the main reason for the sharp increase in the company's profit. By “adding up” the acquisition of Gold Shipping, the profitability of marine and air equipment products has been highlighted. During the reporting period, the company's combined marine and air equipment products achieved revenue of 187 million yuan, with a gross profit margin of 59.29%. Among them, the revenue of high-performance molecular materials products was 4.2320 million yuan, with a gross profit margin of 67.74%; the revenue from the sea-air equipment product business was 187.1999 million yuan, and the gross margin was 59.29%. The subsidiary Golden Shipping is mainly engaged in the military business. Considering the characteristics of centralized delivery of military products in the fourth quarter, we believe that the company's military business is expected to grow significantly throughout the year. At the same time, the company will also use its existing military industry qualifications, market and technical advantages to build the first exemplary civil-military integrated science and technology industrial park in China to form a variety of equipment integrating design, manufacture, and service to cover the defense needs of the entire military, and form a large-scale industry. Accelerate the disposal of inefficient assets through “subtraction” and further healthy development. During the reporting period, the company disposed of three loss-making subsidiaries, namely: it disposed of all 51% of Jiayu Environmental's shares (loss of 360,000 yuan), 100% of Yacht Club's shares (loss of 540,000 yuan), and all 50% of Suzhou Yacht Club's shares. Through the disposal of inefficient assets, the company has not only accumulated experience in the subsequent disposal of inefficient assets, but also laid a good foundation for future healthy development. The natural gas business has increased dramatically, and the EPC business has declined slightly, and it is expected to transform into the military auxiliary ship sector. During the reporting period, the company's natural gas sales business achieved revenue of 413 million yuan (YOY 219.31%). Through market development, along with the Shanghai Municipal Government's increased smog and haze remediation efforts and industrial restructuring, oil companies have accelerated the “oil to gas” process. As a result, the natural gas business revenue increased significantly compared to the previous year. At the same time, the company began to get involved in the LNG fueling business, which is expected to have a positive impact on the company's overall performance in the future. Due to the continued downturn in the shipping market, the company's EPC revenue declined somewhat (-33.68%). However, the company has stepped up the transformation of the shipbuilding and offshore engineering business, actively relying on existing ship design and general contracting capabilities for ship engineering, and taking advantage of the manufacturing advantages and qualification advantages of Jinhaiwan marine life saving and sea and air equipment to collaborate and complement each other in sales channels and industrial chains, and actively develop and reserve related technologies. In the long run, the company plans to enter the small and medium-sized military auxiliary ship market, and is expected to obtain value-added related orders in the future. Profit forecasting and investment advice. EPS is expected to be 0.61, 0.87, and 1.30 yuan respectively in 2016-18. Considering the valuation premium brought about by the transformation of the military business and the growth space for subsequent civil-military integration industrial parks, combined with comparable company valuations, the company will be given 70X in 2016, with a target price of 42.70 yuan, maintaining a “buy” rating.