Event: On the evening of August 10, 2015, the company announced its 2016 semi-annual report, achieving operating income of 142 million yuan, an increase of 72.54% over the previous year; and realized net profit attributable to shareholders of listed companies of 135.375 million yuan, an increase of 3.07% over the previous year. At the same time, the company announced that net profit attributable to shareholders of listed companies from January to September this year was about 19.5 million yuan to 23.41 million yuan, an increase of 0% to 20% over the previous year. Key investment points: Performance was in line with market expectations. The company achieved revenue of 142 million yuan in the first half of the year, an increase of 72.54% over the previous year; net profit was 135.375 million yuan, an increase of 3.07% over the previous year. The performance is within the range of 0% to 20% of the net profit growth rate forecast from January to June, in line with market expectations. The company's revenue increased while operating profit declined during the reporting period because the gross profit of the company's various projects was different. In this period, hardware products with low gross profit accounted for a relatively large share of the e-government informatization projects implemented by the company, leading to a decline in overall gross profit. At the same time, the company announcement also revealed that net profit from January to September 2016 is expected to change by 0% to 20%, and that the growth target of 50% to 120% for the whole year is expected to be achieved. Military orders are growing rapidly, and major military aviation orders are worth expecting. The company has a full range of military salary quality. It is one of the main military air management systems and service providers. The military tasks it undertakes are mainly by directly signing relevant contracts with military users. The contract amount for the company's new military tasks in the first half of 2016 has already exceeded that of 2015. Driven by the national strategy for civil-military integration, it is expected that the company's military orders will continue to grow rapidly. Furthermore, the 238 million “New Generation XX Control Center System” military aviation management project that the company won in 2013 has been transferred to the military aviation “13th Five-Year Plan” and is currently being prepared. According to the current gross profit of the company's air traffic control business, it is estimated that it will bring the company more than 90 million dollars in profit during the 13th Five-Year Plan period, which is worth looking forward to. The launch of new products for 3D measurement, face recognition and virtual reality has injected new vitality into performance growth in the field of 3D measurement. The high-precision 3D full-face camera project of the company in 2015 has completed the development of principle prototypes and application prototypes. The depth measurement accuracy of facial details has reached 0.1 mm, which is at the leading level among similar products in the world. At the same time, the company's new medium- and high-precision 3D facial imaging has now broken through key technologies, and is expected to be launched in the market in early 2017. In the field of face recognition, the company has planned and designed more than 40 kinds of portrait recognition application products. The first batch of 14 products has already been developed, and is expected to be put on the market within 2016 or early 2017. In the field of virtual reality, the company's new product “Digital Planetarium” was sold in the first half of the year. It is expected that other products such as space-time vehicles and VR science classrooms will also be developed and put into production in the second half of the year. Give a “Recommended” rating. It is estimated that the company's 2016-2017 EPS will be 0.21, 0.27 and 0.33 yuan respectively, corresponding to the current stock price of PE 160, 124, and 102 times, respectively. We continue to be optimistic about the company's huge opportunities under the low-altitude airspace reform, as well as the company's strategic layout in the fields of 3D image recognition systems and virtual reality, and give it a “recommended” rating. Risk warning: (1) military orders did not meet expectations; (2) business development such as face recognition and VR fell short of expectations.