The company's operating income for the first half of 2016 increased by 32.97% year on year, and net profit from the mother increased by 20.97% year on year. In the first half of 2016, the company achieved operating income of 534 million yuan, a year-on-year increase of 32.97%; realized net profit of 74.5 million yuan, a year-on-year increase of 20.97%; realized diluted earnings per share of 0.12 yuan; and the gross profit margin of its main business was 39.20%, down 3.82 percentage points from the previous year. Industrial automation revenue growth & Guanzhi and Huaxiao jointly boosted the company's revenue. In the first half of 2016, the company's revenue increased sharply by 32.97% year on year, mainly due to: (1) the original industrial automation business, including intelligent assembly systems, intelligent transfer systems, and intelligent conveying systems, achieved relatively rapid growth; (2) the company completed the acquisition of Guanzhi Automation and Huaxiao Precision in the first half of the year and began merging in May; (3) the power automation business expanded well during the reporting period, with revenue increasing 20.86% year on year. Industrial automation business: The industrial chain layout is perfect, and the product layout continues to expand. In the first half of the year, the company's industrial automation business achieved revenue of 253 million yuan, a significant increase of 49.96% over the previous year. After the acquisition of Guanzhi Automation and Huaxiao Precision, the company's intelligent industrial production and robot application business have achieved a complete industrial chain layout of “intelligent mobile robot arm (hand) - AGV (foot) - flexible production line (body)”. At the same time, the company is focusing on expanding downstream application fields and further expanding fields such as logistics, modern agriculture, and environmental protection with leading advantages in automobiles, machinery, new energy, and electricity. Power automation: New regions and new products help expand. During the reporting period, the company's power automation business (including the original power distribution automation, information and communication business) achieved revenue of 278 million yuan, an increase of 20.86% over the previous year. The company's products have made breakthroughs in many places. Guizhou and Guangxi have expanded into the South Grid region for the first time, and the coverage rate of winning bids has been greatly improved. At the same time, the company's promotion of new products such as power inspection robots, four meters in one, and new fault indicators has also achieved good results. Intelligent electricity+intelligent manufacturing two-wheel drive, active attention. The company started with a medium voltage distribution carrier system business and gradually transformed into distribution automation systems and terminals, electricity automation systems and engineering. The company began its transformation to intelligent manufacturing in 2014. After continuous acquisitions, the company has now created a “smart electricity+intelligent manufacturing” two-wheel drive business pattern. Active attention is recommended. Profit forecasts and investment advice. Considering only the original business of HKUST, in 2016-2018, the company's operating income is estimated to reach 1.102 billion yuan, 1,389 million yuan, and 1,708 million yuan; net profit of the mother reached 179 million yuan, 236 million yuan, and 297 million yuan, respectively, up 31.23%, 31.63%, and 25.75% from the previous year. Guanzhi Automation and Huaxiao Precision began merging in May 2016. After merging, net profit for 2016-2017 is estimated to reach 248 million yuan, 346 million yuan, and 430 million yuan, and earnings per share after additional dilution are 0.37 yuan, 0.51 yuan, and 0.63 yuan. Considering the high overall valuation of the industry and the significant synergy effect of the company after completing the acquisition, the company was given a valuation of 70-75 times in 2016. The company's reasonable valuation range was 25.90-27.75 yuan/share, increasing its holdings rating. risk factors. The risk of industrial integration falling short of expectations.