The company released its 2016 semi-annual report, achieving operating income of 345 million yuan, a year-on-year increase of 26.87%, net profit of 32.218 million yuan, an increase of 5.21% over the previous year, and net profit of 31.7072 million yuan after deducting non-return net profit of 31.7072 million yuan, an increase of 4.47% over the previous year. The performance was in line with expectations. Key investment points: The boom in the industry has maintained rapid revenue growth, and the focus on research and development has led to an increase in R&D investment. The growth rate of the company's operating income has accelerated. The company's main business, multimedia information systems, achieved revenue of 174 million yuan, which is within a reasonable range, while the production monitoring system and data center system achieved revenue of 0.67 million yuan and 103 million yuan respectively, up to 416.57% and 466.28% over the previous year, mainly due to the explosion of industry demand. On the other hand, since the company's R&D investment increased by 62.76% over the same period last year, the performance growth rate was slightly lower than expected, mainly because in the second half of 2015, the company added fund-raising R&D projects such as cloud video, etc., but in the long run, the company is committed to cloud video R&D and promotion, and R&D investment can be converted into productivity in the future, which is conducive to improving the company's competitiveness and continuing business growth. The data center construction and service business is growing rapidly, and the synergy effect with NetRungeke is remarkable. The company's data center business revenue accounts for 30% of total revenue, which has become one of the important contributors to the company's performance. On the one hand, the explosion in the data center business has benefited from the increase in market demand, and on the other hand, it has come from the synergy of the Internet Runjieke. Zhenshitong previously announced that it plans to issue shares and pay cash for 400 million yuan to acquire 100% of NetRunjet's shares. NetVision's main business is data center construction, including network construction, network security system construction, application delivery system construction, IaaS cloud computing, etc., while Zhenshitong established an independent data center division in 2009, mainly engaged in data center infrastructure construction. If the acquisition is completed, True Vision can provide complete construction solutions for data centers, and the synergy effect is obvious. The strategic layout of the company's 3 cloud, 3+, and 3 platforms is gradually being implemented, and the industry boom cloud video and data center business is expected to continue to grow, giving it a “recommended” rating. We expect the company's EPS from 16 to 18 to be 0.89, 1.11, and 1.26 yuan respectively. Considering the company's obvious competitive advantage in cloud video and the guarantee of data center business collaboration, we gave it a “recommended” rating. Risk warning: Cloud video promotion falls short of expectations.