Event: On August 10, the company released the 2016 semi-annual results announcement and achieved steady growth. In the first half of 2016, the company achieved operating income of 1,203 billion yuan, an increase of 13.50% over the previous year; and realized net profit of 92.22 million yuan, an increase of 17.29% over the previous year. Deeply cultivate the three major businesses, and upgrade manufacturing to enhance competitiveness. The company is a leading manufacturer and service provider of precision aluminum alloy and magnesium alloy structural parts and communication radio frequency devices in China, and is deeply involved in the three major industries of communications, automobiles and consumer electronics. During the reporting period, the company actively cultivated innovative capabilities and developed core competencies; invested in the introduction of advanced manufacturing equipment, upgraded the manufacturing platform, further enhanced the company's manufacturing capacity and competitiveness, and laid a solid foundation for the company's development. Entering the Tesla industry chain, the automotive products business has promising prospects. The company is entering lightweight and intelligent automobiles and is actively developing the NEV structural parts business. During the reporting period, the company obtained its supplier qualification through a series of certifications by Tesla and received the first order for Tesla's energy inverter busbar products. At the same time, the company was invited to participate in the technical evaluation and quotation of products such as die-cast aluminum, magnesium alloy structural parts, and bus sheet metal parts for Tesla Model 3. We believe that with the further deepening of cooperation with Tesla, the company's new automotive products business will reap a lot. Open up the field of military and aerospace, and open up space for future imagination. During the reporting period, the company obtained 52% of the shares of Beijing Chiyilong Technology Co., Ltd. and Xi'an Xinghang Aviation Manufacturing Co., Ltd. Beijing Chiyilong focuses on the army's core equipment and has complete military products with four military certificates; Xi'an Xinghang's main business is precision manufacturing of metal parts for the aviation, aerospace, and weapons industries, and its process technology is at the advanced level in China. The company has signed separate strategic cooperation agreements with Shen Fei Minji and Shen Fei International. By entering the military and aerospace parts market, the company has further enhanced its profitability and core competitiveness, opening up room for imagination for the company's future growth. Profit forecast and investment advice: The company is one of the professional service providers with the most R&D strength and large-scale production capacity for precision aluminum alloy structural parts in China. We expect the company's 2016-2018 EPS to be 0.28 yuan, 0.44 yuan, and 0.60 yuan, respectively, and the corresponding dynamic PE is 35 times, 23 times, and 17 times, respectively. For the first coverage, we gave a “buy” rating. Risk warning: the risk that the military business is progressing less than expected, the risk that the automotive electronics business falls short of expectations, the risk of a decline in the communications sector market, etc.