Incidents: The company announced its 2016 semi-annual report, achieving operating income of 801 million yuan, an increase of 21.45% over the previous year; realized net profit attributable to shareholders of listed companies of 5.1997 million yuan, a sharp increase of 136.31% over the previous year, and achieved continuous profit in the past three quarters; basic earnings per share of 0.0167 yuan, an increase of 129.30% over the previous year, and a higher performance increase than expected. Revenue and net profit rebounded year on year, and the main business was clearly driven by the main business: during the reporting period, the company's revenue increased by 21.45% year on year, net profit attributable to shareholders of listed companies increased 136.31% year on year, and net profit increased 150.8% year on year. Mainly due to the fact that the construction business, which accounted for the largest share of performance, changed from negative to positive in terms of revenue and profit and increased significantly, the construction industry achieved net profit of 3.856 million in the current period (loss of 43.44 million in the same period last year). Also, since the company returned the principal and interest of loans from the controlling shareholder High Investment Group and some bank loans after completing a fixed increase in 2015, interest was drastically reduced, and the current financial expenses were -100% compared to the same period. Business adjustments are beginning to bear fruit, and performance is expected to continue to rise: in terms of revenue composition, in the first half of the year, the company's construction industry achieved revenue of 715 million yuan, +27.58%, accounting for 89.06% of revenue, an increase of 4.17 pct over the previous year, and net profit of +355.21%; real estate rental business revenue was 20.66 million, +20.57% year on year. The company's main business adjustments are beginning to bear fruit, and performance has gradually entered a period of steady recovery. We have pointed out many times in our previous series of reports that the company's main business is not prominent, and the future focus will still be on the upgrading and transformation of the main business. Apart from gradually divesting inefficient assets with poor prospects, there is still a need to improve the efficiency of the main business. In the first half of the year, the company's construction sector gradually laid out municipal projects and plant construction projects with low risk and high profit levels, etc., and the gross profit level is expected to be restored in the future. During the reporting period, its Beite Jianan municipal project won a bid amount of 73,57585 million yuan, accounting for 90.94% of the total bid amount. Net profit after deduction turned negative into positive, and the light was clear: the company's net profit had turned a loss into a profit at the end of 2015, but it was mainly due to the sale of subsidiaries to major shareholders in 2015, which achieved investment income of 138.8 million yuan. In the first half of 2016, the company achieved net profit of 38.86 billion dollars after deducting non-recurring profit and loss, turning negative to positive for the first time since 13 years, reflecting that its main business is gradually on the right track. Financial stability and sufficient cash have laid the foundation for subsequent transformation: at the end of the reporting period, the company had cash in hand of 1,028 billion yuan, a year-on-year decrease of 21.03% (mainly a decrease in demand deposits that can be paid at any time), yet it still accounts for about 1/3 of the company's current market value, and the short-term debt repayment ratio is about 27. The company's current balance ratio is still 83.2%, but the debt structure mainly consists of short-term payables such as the company's futures business guarantees and project transactions, and high-interest debt has been drastically reduced (-63.9% for long-term loans, -22.5% for long-term loans). The ability to control fees has improved, and the third rate has declined steadily: during the reporting period, the company's three rate level was only 7.20%, down 5 percentage points from the previous year, a record low for the company. The company's management expenses and sales expenses fell by nearly 12 million compared to the same period, while interest expenses were reduced. The total amount of three fees fell -28.40% year on year, reflecting a significant increase in its ability to control fees in its main business. The majority shareholders are determined to do a good job in listed companies: the company's controlling shareholder, the company's controlling shareholder, has gradually formed a “5+1” business pattern of construction and development, industrial investment, asset management, technology finance, and park operation. Among them, the park operation sector group plans to operate separately and has certain high-quality real estate resources. In addition, the group is rich in emerging industries and incubators such as information technology, biology, high-end equipment, etc., which is expected to inject fresh blood into the company. In 2015, Gao Investment Group acquired the company's assets at a high premium of 247 million dollars in full cash, which reduced the company's debt repayment and interest pressure, and greatly optimized its capital structure and cash strength. At the same time, the majority shareholders previously promised that the company would not be overthrown or relinquish its controlling position within a year, reflecting their firm determination and motivation to build a good listing platform. Investment suggestion: After turning a loss into a profit as disclosed in the 2015 annual report, the company's main business gradually came out of trouble and achieved a recovery in performance and business focus. We expect the company's EPS for 2016-2018 to be 0.18, 0.22, and 0.25 respectively, corresponding to the PE multiples of the current stock price of 72.8X, 58.4X, and 50.9X, maintaining the buy-A investment rating, with a target price of 18.6 yuan for 6 months. Risk warning: transformation and upgrading are slow, and the growth of the main business is weak.