Core ideas:

According to the 2016 interim report, the company achieved operating income of 88.809 million yuan during the reporting period, down 56.81% from the same period last year, and a net profit loss of 28.87 million yuan, down 198.93% from the same period last year. The loss was reduced by 5.11% compared with the performance forecast. The company also predicted that cumulative net profit in the third quarter is still likely to be negative.

Affected by the decline in industry demand, all businesses have declined in the first half of the year, and the company's business has declined due to the overall decline in the macro-economy, the extension of the implementation period of the project, the intensification of market competition, and the decline of the company's sales revenue and gross profit margin. Among them, the income of the intelligent logistics transportation system was 46.96 million yuan, accounting for 53.39% of the main business income in the current period, down 34.70% from the same period last year, mainly due to the slowdown in the growth rate of the downstream automobile and construction machinery industry and the decrease in orders; the intelligent logistics warehousing system achieved revenue of 34.8 million yuan, accounting for 39.56% of the main business income in the current period, down 70.67% from the same period last year. The revenue of the intelligent three-dimensional parking system reached 4.6318 million yuan, accounting for 5.27% of the main business revenue in the current period, down 65.37% from the same period last year. The decline in these two types of business is mainly due to the lack of completion and acceptance of large-scale projects.

Intelligent logistics warehousing and intelligent three-dimensional parking business are still the focus of the future. The company's traditional main business is affected by the downstream boom, and orders decline. At present, in the company's business system, intelligent logistics warehousing business and intelligent three-dimensional parking business are the focus of the future. Among them, the prosperity of intelligent logistics warehousing industry is still relatively good, in e-commerce and express delivery and other areas of continuous development. In terms of intelligent three-dimensional parking business, the company focuses on operation and has obtained garage orders in Tianjin, Kunming and other operating plots. With the arrival of the turning point of the industrialization of the intelligent three-dimensional parking industry and the increase in the demand for public supporting and self-built garages, the company's garage business in the future is still dominated by regional expansion and replicated nationwide with the model of regional partners.

Investment suggestion: we predict that the operating income of the company from 2016 to 2018 is 3.62,5.27 and 704 million yuan, and the EPS is 0.21,0.35,0.61 yuan respectively. The company has excellent hardware and software strength and good general contracting capacity, continuous layout in the field of three-dimensional garage, we continue to maintain the company's "buy" rating.

Risk tips: the main business demand decline, garage business does not meet expectations; intelligent logistics warehousing does not meet expectations.