Key investment points: Interim results declined year on year, and major improvements are expected in the second half of the year. The company's performance from January to June 2016 also declined significantly. We judge that it was mainly due to the long settlement period for some of the company's large GGH/MGGH orders, revenue was not reflected, and the year-on-year decline in sales revenue for facade decoration enamel materials. The company's current total major orders reached 220 million yuan, equivalent to 52.38% of the company's 2015 revenue of 421 million yuan. It is still in a manageable state of contract execution. According to convention, most of the project settlement nodes are before the end of the year, and the overall revenue level is expected to improve significantly in the second half of the year. The market for ultra-low emission transformation of thermal power is broad, and APH/GGH/MGGH is still very popular. We believe that between 2016 and 2018, a large number of coal power units will need to be upgraded with ultra-low emissions across the country, which is expected to have a huge impact on efficient desulfurization, denitrification and dust removal facilities in power plants. The company's industrial enamel business revenue is expected to continue to grow during the year, and we are optimistic that industrial enamel, including air preheaters, low temperature economizers, and new environmentally friendly enamel materials, will maintain a high growth rate in the future. Rail transit decoration and green curtain walls are in wide demand, and the company has broad development space. It is estimated that more than 2,000 kilometers of urban rail transit will be built in the next 3 years, involving an investment of about 1.6 trillion yuan. Facade decoration enamel materials have many advantages and have been widely used in most new subway projects in China. We predict that the company is expected to face market demand of about 1 million square meters in the next 3 years, with a compound annual growth rate of 56.02%. We are optimistic that the company's leading position in the industry will be further stabilized after the release of production capacity, and will greatly benefit from the booming development of rail transit construction. The first phase of the employee stock ownership plan was completed, building long-term development momentum. The first phase of the company's employee stock ownership plan completed the stock purchase. The average transaction price was 19.94 yuan, and the lockdown period was 12 months. We believe that implementing the employee stock ownership plan is in line with the company's development strategy and employment philosophy, and will help to fully mobilize the enthusiasm of the company's employees and build a driving force for the company's long-term development. Profit forecast and investment rating: We are optimistic about the company's leading position in the domestic enamel industry. The industrial chain is complete, technical advantages are remarkable, and enamel materials for industrial protection and facade decoration have a high market share. The company's development growth rate has slowed since 2015. We believe that the current point is a bottleneck in the company's development. In the future, with the release of new production capacity and the fulfillment of major orders, performance will return to a rapid growth trend. It is predicted that the company's EPS for 2016-2018 will be 0.44, 0.58, and 0.76 yuan, respectively. The price-earnings ratio valuation corresponding to the current stock price is 47.96, 36.29, and 27.48 times, respectively. For the first time, coverage gave it an “increase in holdings” rating. Risk warning: risk that market demand for thermal power energy saving and environmental protection equipment such as MGGH does not meet expectations; risk that contract performance and repayment progress for energy saving renovation projects do not meet expectations; risk that the scale and progress of rail transit construction projects do not meet expectations; risk that market demand for enamel panel building curtain wall materials does not meet expectations; risk that the company's performance of major projects does not meet expectations, etc.