Matters: In the first half of 2016, the company achieved operating income of 377 million yuan, a year-on-year increase of 21.44%; net profit after returning to the mother was 14.29 million yuan, a year-on-year decrease of 6.33%. The company's basic earnings per share are 0.04 yuan, and the company's performance is in line with our expectations. Ping An's view: The main business has steadily improved, and diversified layout has accelerated: during the reporting period, the company achieved revenue of 377 million yuan, an increase of 21.44% over the previous year, and net profit of 14.29 million yuan after returning to the mother, a decrease of 6.33% over the previous year. The steady performance in the first half of the year was mainly due to the strength of the company's traditional main business, the intelligent environmentally friendly power equipment business. In a situation where overall market demand was declining, the company actively expanded domestic communication operators and IDC markets and continuously improved overseas sales channels. The main business, such as environmentally friendly low-noise diesel generator sets, achieved revenue of 352 million yuan, an increase of 25.52% over the previous year; other businesses achieved revenue of 24.45 million yuan, a year-on-year decrease of 17.37%. During the reporting period, the company is speeding up its diversified layout and plans to establish wholly-owned subsidiaries for power transmission and distribution and special vehicles, each with a registered capital of 51 million yuan. At present, the company has obtained a technical license for medium and low voltage switch equipment from General Electric, laying a good technical foundation for transmission and distribution electronics companies to further develop intelligent, high-performance, green and environmentally friendly power transmission and distribution products. The NEV business has dug deep into high ground, and policies are expected to be settled in the third quarter: factors such as industry policies and market environment have limited the performance of the company's NEV sector to a certain extent. During the reporting period, the company's NEV business achieved revenue of 14.88 million yuan, a year-on-year decrease of 13.34%; gross margin reached 12.80%, a year-on-year decline of 12.15 percentage points. On the basis of vehicle customers such as Suzhou Jinlong and Xiamen Jinlong, Jetstar has further established partnerships with FAW, South China Automobile, Southeast Motor, etc., and cooperated to develop a variety of special models for urban logistics such as Iveco; Jietai formed cooperative relationships with many logistics companies such as Yuantong and Yunda, and obtained a good share in the tenders of some logistics companies. Up to now, no domestic electric distribution models have entered the NEV promotion catalogue. We expect that with the settlement of fraudulent inspection results in August, the entry and release of electric distribution vehicles will be significantly accelerated. Profit forecast and rating: The company's EPS for 16-18 is expected to be 0.25, 0.38, and 0.54 yuan, corresponding to the closing price of PE on July 29, which is 83.9, 55.7, and 39.3 times, respectively. We are optimistic about the company's first-mover advantage in the field of electric logistics vehicles and maintain the “recommended” rating. Risk warning: 1) The risk that the policy falls short of expectations; 2) the risk that the sales of electronic logistics vehicles fall short of expectations.