Investment Highlights The company released its 2016 semi-annual report: In the first half of 2016, the company achieved operating income of 564 million yuan, an increase of 38.06%; achieved net profit attributable to shareholders of listed companies of 112 million yuan, an increase of 32.85% over the previous year; and achieved basic earnings per share of 0.14 yuan, an increase of 27.27% over the previous year. The computerized horizontal machine business picked up, and revenue increased dramatically. In the first half of 2016, the company's computer horizontal machine business picked up significantly, and the computer knitting machine business revenue increased by 34.76% year-on-year. The growth points mainly come from three aspects. One is the demand for natural renewal of computer flat machines in the domestic market. Currently, the domestic market has 600,000 units, and some worn and aging equipment needs natural renewal; the second is strengthening the expansion of overseas markets. Taking Bangladesh as an example, the Bangladeshi market has replacement demand for 400,000 to 500,000 hand-cranked horizontal knitting machines; third, the company's sales volume from 2013 to 2015 was 169 units, 484 units, and 876 units respectively. The first half of this year continued to grow at a high rate of 139%, and the growth trend was good. The gross margin and expense ratio remained stable. The company's overall product gross profit margin for the first half of 2016 was 39.5%, the same as the same period last year. Among them, the gross margin of knitting machinery declined slightly and remained stable overall. The sales expense ratio, management expense ratio, and financial expense ratio were 11.4%, 11.9%, and -4.9%, respectively, up 0.1, -1.1, and 2.4 percentage points year-on-year, respectively. The company's main business has been growing steadily over a long period of time, industrial robot system integration and service robot layout are flourishing, and future profitability will be more stable. Profit forecast and investment advice: We expect the company's EPS to be 0.19 yuan, 0.25 yuan, and 0.34 yuan respectively from 2016 to 2018, maintaining the “recommended” rating. Risk warning: New product promotion results fall short of expectations; the macroeconomic environment deteriorates.