[Case: _S Public Company] Semi-annual report: The first half of the year achieved revenue of 928 million yuan, yoy +9.71%; net profit of 82.4516 million yuan, yoy +1.02%, corresponding eps of 0.1 yuan/share. Key investment points: Performance growth has slowed due to a sharp decline in exports, and orders are still sufficient. There is support for future growth 1) Looking at the business segment, the company's mold business grew by 18.55% in the first half of the year and maintained relatively rapid growth. The gross profit fell slightly by 1.15 percentage points. It is estimated that it is mainly related to the mold product structure. In terms of orders, new orders of 638 million yuan were signed in the first half of the year, yoy +44.02%. Based on this, we estimate that the company's current orders are still above 2 billion yuan, which can support the company's continued rapid growth in future revenue. Furthermore, the revenue of the stamping parts business fell 16.44% year on year, mainly due to the decline in automobile production and sales and changes in product structure. 2) Looking at the subregion, domestic sales increased by 60.73% in the first half of the year, exports fell 55.05%, and gross margin changes were 7.73/ -13.50%, respectively. European subsidiaries turned losses into profits, and operations improved significantly (revenue of 101 million yuan, yoy +174.53%; net profit of 292,600 yuan). We expect that the sharp decline in exports is mainly related to order fluctuations. Judging from the 79% year-on-year increase in new orders for export molds in the first half of the year and the recovery in operations of European subsidiaries, it is expected that exports will return to a rapid growth channel in the future. The growth of the main mold business is still sustainable, and diversified development is seeking new growth points 1) The company continues to promote standardization and specialization of mold manufacturing, thereby shortening the mold processing cycle and improving production efficiency, which is conducive to improving the company's ability to accept orders and speeding up the company's order completion progress. Furthermore, improving mold quality through the introduction of advanced production processes and management models of European companies is conducive to further developing high-end customers (European companies have already undertaken some high-end projects) and raising profit levels. 2) According to estimates, the global third-party automobile cover mold market is over 80 billion yuan, and the market space is huge. At the same time, major automobile mold industries in Europe and the US are shifting to low-cost countries such as China. In the future, the company will promote the construction of plants in North America and India to enhance the company's global supply capacity. We believe that with our scale, technology, high-quality customer resources and product cost performance advantages, the company's mold export business will continue to grow rapidly in the future. 3) The company's convertible bond project mainly invests in large-scale multi-position progressive model projects. The annual revenue after delivery can reach 436 million yuan and net profit after tax can reach 48.5 million yuan, which will increase the company's future export growth. 4) In the first half of the year, the company invested in the establishment of Tianjin Qingyan Lushi Investment Management Co., Ltd. and initiated the establishment of the Tianjin Qingqi Lushi Equity Investment Center to further explore good projects. At the same time, the company continued to actively seek cooperation projects and continue to explore diversified strategic layouts in high-tech fields and emerging industries such as aerospace, military, new energy, intelligent manufacturing, and high-end equipment manufacturing. These will help spread the company's business risks and seek new growth points for future long-term development. Adjust the profit forecast and maintain the “increase in holdings” rating. Overall analysis, we adjusted the profit forecast: the company's 2016-18 EPS is expected to be 0.22/0.29/0.40 yuan/share, corresponding to PE in 2016, 34 times, maintaining the “increase in holdings” rating. The automobile industry targets a weak cycle. There are sufficient orders in hand, and exports will continue to grow rapidly in the future. The long-term strategic goal is to become the new “flagship” of the world automobile mold industry with complete facilities, strong technical strength, and a complete industrial chain. Continued attention is recommended. Risk warning: domestic and export mold business growth fell short of expectations; period cost growth exceeded expectations; convertible bond project commissioning progress fell short of expectations; exchange rate risk.