Falson (000890.CH/RMB 11.43, no rating) announced the 2016 interim report: revenue of 940 million yuan, up 14% year on year; net profit from net income of 0.4 billion yuan, up 18% year on year; basic earnings per share of 0.10 yuan. Bank of China Non-Bank review: Profit from metal products is limited, and factoring escort performance growth The company's metal products business developed steadily during the reporting period, but gross margin was low and profit margins were limited. The business's revenue was 710 million yuan, an increase of 0.8% over the previous year. The company actively sought new profit points and completed the acquisition of Mosan Factoring with 1.2 billion dollars in cash. With the outstanding profitability of the factoring business, the reporting period achieved revenue of 210 million yuan and contributed about 60 million yuan to the company's net profit, driving growth in the company's performance. The development of the main business is under pressure. The timely divestment of the company with loss-making assets is currently the world's largest production base for special medium and fine steel wire ropes. However, due to many adverse factors such as low demand, increased costs, and fierce competition, the development of the metal products business is under pressure. The company has successively divested loss-making assets such as Bekaert Steel Wire Products Company, Jiangyin Falson Steel Products Co., Ltd., and Jiangyin Falson Metal Products Co., Ltd. The company is moving forward lightly, and performance is expected to improve. Mosan Factoring increased its capital by 340 million yuan, striving to build a new financial brand company, and increased Moshan Factoring by 340 million yuan, further increasing its net assets. The company actively carries out factoring business, reserves project resources, and realizes accounts receivable financing for customers. Moshan's factoring business involves many industries such as trade, energy, machinery manufacturing, and construction engineering, and focuses on building the most valuable new financial brand. From 2016 to 2018, Moshan Factoring's performance commitments were 120 million yuan, 160 million yuan and 184.5 million yuan, respectively. The factoring industry has broad prospects. The first-mover advantage of pure factoring standards is remarkable, and the potential accounts receivable stock of domestic enterprises continues to rise. The capital requirements of small and medium-sized enterprises are high, and the prospects for the factoring industry are broad. As China's first leading commercial factoring company to issue ABS, Moshan Factoring is actively expanding financing channels and reducing financing costs. In addition, Moshan Factoring has significant brand advantages, providing the company with a wide range of business reach, and the scale of factoring business continues to expand. As the only pure factoring target in the A-share market, the company's future development is worth looking forward to, and long-term attention is recommended.