2016 Interim Report: The company's performance in the first half of the year increased year-on-year, and the company achieved revenue of 298 million yuan in the first half of the year, a year-on-year decrease of 32.12%; net profit attributable to the parent company - 119 million yuan, a year-on-year decrease of 78 million yuan; basic earnings per share - 0.20 yuan, a year-on-year decrease of 0.13 yuan; and weighted average return on net assets -3.82%, down 2.40 percentage points year on year. Among them, the second quarter achieved revenue of 159 million yuan, up 14.23% month-on-month and down 35.97% year-on-year; net profit attributable to the parent company was -38 million yuan, a month-on-month loss of 43 million yuan and a year-on-year increase of 35 million yuan; and basic earnings per share of -0.06 yuan, up 0.08 yuan from the previous month and down 0.06 yuan from the previous year. The sales volume and price of iron powder fell sharply. The company's losses worsened in the first half of the year. The company's iron powder sales volume fell 15.59% year on year, and the average sales price fell 12.05% year on year. Dragged down by the sharp decline in the volume and price of iron powder, the company's revenue in the first half of the year fell 32.12% year on year. Since the decline in operating costs was less than the decline in operating income, the gross profit of the company's products was lost. The impact on foreign mining is compounded by weak supply and demand in the steel industry. Demand for iron ore has declined further. In recent years, the top four international iron ore giants have rapidly expanded production capacity and production, and mining costs have been continuously reduced, continuously squeezing domestic high-cost iron ore production capacity. At the same time, domestic demand has declined due to economic restructuring, and there is a general trend of reducing production capacity, and there is a ceiling in iron ore demand. The rise in mineral prices favors the company in the short term, maintaining the company's “neutral” rating from the second quarter to the third quarter of this year. Benefiting from strong demand for real estate and infrastructure, and rising steel prices, driving up iron ore prices, the company experienced a month-on-month improvement in the second quarter, and the profit situation in the third quarter is expected to remain the same as in the second quarter. Looking at the whole year, it is difficult for the company to reverse losses, and the company still needs to continue to reduce costs and maintain the company's “neutral” rating. The 2016-2018 EPS is expected to be -0.23, 0.01, and 0.02 yuan/share, respectively. Risk warning: changes in the economic situation; fluctuations in raw material costs and product prices; corporate management governance, etc.