Incidents: The company announced its 2016 interim report. It achieved operating income of 669 million yuan during the reporting period, a year-on-year decrease of 25.40%; net profit attributable to listed companies was 34.871 million yuan, a year-on-year decrease of 16.13%. Key investment points: Revenue declined due to a sharp contraction in the product sales business. During the reporting period, the company's commodity sales business revenue was 185 million yuan, a sharp decrease of 52.28% over the same period last year, which was the main reason for the year-on-year decline in the company's total revenue in the first half of the year. Considering that the gross margin of this business is less than 5%, the impact on the company's net profit is relatively limited. Giving full play to geographical advantages, the iron and water intermodal transport business continues to grow. During the reporting period, the company gave full play to the unique advantages of the five major railway and water intermodal transport port areas of Maoertuo, Jiangjin, Jiulongpo, Guoyuan, and Wanzhou, actively explored the market, expanded the hinterland of the port economy, and increased the company's control over the water transport market. The main volume indicators of natural tonnage handling, cargo throughput and container throughput increased to a certain extent compared to the same period last year. Among them, container throughput stopped falling and rebounded, and iron and water intermodal transport continued to maintain a steady growth trend. The positive effects of the national strategy are gradually showing. Chongqing is an important strategic fulcrum of the Silk Road Economic Belt and the western central hub of the Yangtze River Economic Belt. Cuntan Port and Guoyuan Port, which belong to the company, are important carriers of the Belt and Road strategy. With the continuous implementation of national strategies such as the “Belt and Road”, the Yangtze River Economic Belt, and the third cooperation project between the Chinese and Singapore governments, Chongqing will better play the important strategic support role of the western opening up, the functions of the Yangtze River Golden Waterway will be further enhanced, the Yangtze River logistics freight volume is expected to continue to grow, and the port industry will generally continue to maintain a steady development trend. In the strategic construction of Chongqing's “Belt and Road” and Yangtze River Economic Belt, the high-quality status of Chongqing Hong Kong and Kowloon is highlighted, and the positive effects of benefiting from the national strategy will gradually become apparent. Investment suggestions: The company's production and operation are gradually shifting from a traditional single port handling model to a full-process logistics model. The service value chain has been greatly extended, control over the port logistics market has been significantly strengthened, and the scale of operations has been continuously expanded. The transformation and upgrading of the port business model has been realized. With the support of the national strategy, the company's performance is expected to continue to grow steadily. The company's 2016-2018 EPS is expected to be 0.13 yuan, 0.16 yuan, and 0.22 yuan, respectively. Covered and given a “recommended” rating for the first time. Risk warning: The risk that macroeconomic sentiment will continue to decline.