Event: On August 10, the company released its 2016 semi-annual report. In the first half of 2016, the company's revenue was about 574 million yuan, an increase of 55.85% over the previous year, and realized net profit of about 171 million yuan, an increase of 51.94% over the previous year; basic earnings per share were 0.18 yuan/share. The company's performance growth is in line with our expectations. Comment: The engineering business continued to gain strength, driving a sharp increase in profit in the first half of the year. The company's operating income and net profit increased rapidly year-on-year, mainly due to the continued expansion of the engineering business. The installation business revenue (328 million yuan) increased 147.28% year on year, and its share in total revenue increased to 57.11%. Currently, the total number of project contracts currently being executed by the company (over 20 million in a single unit) is about 924 million yuan. Sufficient order reserves will provide a strong guarantee for the company to maintain a relatively rapid growth rate. Gross margin fluctuated slightly, and overall profitability remained stable in the first half of the year. The company's comprehensive gross profit margin was 53.46%, a decrease of 3.0 percentage points over the previous year, mainly due to the fact that operating costs increased faster than revenue. By business, the gross profit margin for water supply was 49.95%, a decrease of about 4.4 percentage points from the previous year; the gross profit margin of engineering installation was 56.88%, a decrease of about 2.8 percentage points from the previous year. We believe that the fluctuations in the company's gross margin are within a reasonable range. Also, in the first half of the year, the company's annual fee rate increased by about 1.1 percentage points over the same period last year, mainly due to a slight increase in financial rates and good cost control. Overall, the company's profitability remains relatively stable. Accelerating the business layout and expanding new space for growth based on the water business, the company actively extended the industrial chain, established the Jinxiu Jiangnan subsidiary to invest in the construction of a comprehensive industrial waste utilization project in Qinwangshan, Jiangyin, and entered the field of industrial solid waste and hazardous waste. In the future, the solid waste treatment business is expected to become a new profit growth point for the company. The company plans to launch an environmental industry fund with Huakong SEG, Huanneng Technology, and Taihong Ecology to jointly lay out emerging environmental fields such as sponge cities and black and smelly water treatment. The smooth expansion of new business will open up broad development space for the company. Furthermore, the company plans to participate in the establishment of a financial leasing company. Testing the waters of financial leasing, while bringing investment income to the company, can also provide a new way for the company to revitalize its existing assets and further broaden financing channels, which is expected to promote the better development of the company's main water and environmental protection business. The investment proposal kept the company's profit forecast unchanged. We believe that the company's internal growth is strong and strong, and the business layout is progressing steadily. In the future, as the pace of state-owned enterprise reform accelerates, the company's development is expected to continue to accelerate. Be optimistic about the company's potential for continued growth and maintain a “buy” investment rating. Risk warning 1) Project execution progress is lagging behind;