Key investment points: There were not enough new orders signed in '15, and the performance in '16 was under pressure. 1H16 had revenue of 928 million yuan, +10% yoy, net profit of 82 million yuan, +1% yoy; net profit after deducting net profit of 80 million yuan, +2% yoy. The company's mold business revenue is 684 million yuan, +19% yoy (1H15 is +43%), and stamping parts revenue is 206 million yuan, -16% yoy (1H15 is 85%). We believe that the slowdown in mold business revenue was mainly affected by the decline in new orders signed in 2015, 1H15 signed new orders of 443 million yuan, -42% yoy, and new orders signed for the full year of 2015, 1,054 million yuan, -17% yoy. Due to the manual production cycle for automotive mold orders, we expect the mold business to be under pressure in 2016. The decline in the stamping business is expected to narrow throughout the year due to the application of thermoforming technology; there are plenty of new orders signed, and the year 17 ushered in an inflection point in performance. The company's new order situation in 2016 is relatively good. In 2016, 1H16 completed new orders of 638 million yuan, a sharp increase of 44% over the previous year. We expect the total number of orders for the whole year to exceed 1.4 billion yuan. Therefore, we are optimistic about the recovery in the performance of the company's mold business in 2017. In addition, the company successfully issued 420 million yuan of convertible bonds in early 2016. The fund-raising project was “large-scale multi-station advanced mold development, manufacturing, and application industrialization”. After completion of the project, the company's business will complete expansion from mold manufacturing to “mold manufacturing+stamping parts manufacturing+assembly and welding service”, increasing profitability; traditional automobile giants will drive the growth of new energy vehicles. Although new energy is under pressure from subsidy cuts, traditional automobile manufacturers' new energy vehicle investment plans have not been affected. For example, Changan Automobile plans to have a cumulative capital expenditure of 18 billion yuan on new energy vehicles in 2016-2018, and SAIC Motor Group plans to spend more than 20 billion yuan on new energy vehicles in 2016-2020. We believe that the reduction in NEV subsidies can avoid ineffective competition and help excellent automobile companies stand out. Therefore, we believe that the introduction of new energy vehicle models will accelerate in the next 2 years, and that companies that are suppliers of Tesla and NIO will directly benefit; participating holding companies are operating steadily and have abundant project reserves. Through effective integration, the company's foreign investment has achieved good business performance. The German mold company 1H16, which was acquired earlier, reversed losses, and Dongfeng Industrial 1H16, a shareholding company, achieved net profit of 49.75 million yuan. Shenyang Tianqi Model Aeronautical Parts Co., Ltd. which was invested and established earlier is also on the right track. The company cooperated with the Tsinghua Department to establish Tianjin Qingyan Lu Shi Investment Management Co., Ltd. to explore good projects together. According to the interim report, in the future, the company will continue to develop a diversified layout focusing on fields such as aerospace, military industry, new energy, intelligent manufacturing, and high-end equipment manufacturing; the target price is 8.36 yuan, maintaining the buying rating. The median PE valuation of comparable companies in the mold industry in 2016 was 39 times, and the median PE valuation of comparable companies in the new energy industry chain in the machinery industry in 2016 was 103 times. Considering the company's potential profit inflection point in 17 years, we gave the company 38 times PE in 2016. It is estimated that 2016-2018 diluted EPS will be 0.22 yuan, 0.29 yuan, 0.41 yuan, target price 8.36 yuan, purchase rating; risk alert. Automobile sales continued to decline, and subsidies for new energy vehicles declined.