1H2016 predicts a 36-63% year-on-year increase in profit. National Technology announced the 2016 semi-annual results forecast. The company expects net profit attributable to shareholders of listed companies to be 40 to 48 million yuan in the first half of 2016, an increase of 35.97 to 63.16% over the same period last year. Focus on key points The main control chip of financial terminals drove revenue in the first half of the year. The company revealed that sales of USBKEY products declined in the first half of the year. The revenue contribution of domestic financial IC cards has not improved since the market has not fully started. The mobile payment chip RCC business is currently still exploring new operating models, so the revenue contribution is not significant. We expect the company's sales revenue to rise in the financial terminal master control chip market (secure storage chip), which can achieve a year-on-year increase in revenue in the first half of the year. Control management costs and rationally plan R&D expenses to achieve performance growth. The company balances medium- to long-term and immediate R&D investment, while strengthening supply chain management and reducing product costs; strictly managing various expenses and intensively allocating resources, profits will increase year-on-year. Long-term driving - Mobile payments are being launched at an accelerated pace under the impetus of Apple Pay, and national technology is a bottom-up driver. Since Apple launched Apple Pay, the mobile payment ecosystem has begun to expand, and mobile payments are on the rise. The RCC2.45GHz mobile payment solution, as a national technology patent technology, is another mobile payment solution other than NFC in China. 2.45 GHz technology has been tested in some second-tier cities in China, and the penetration rate is currently low. On December 30, the Ministry of Industry and Information Technology announced on its official website 8 national standards, including “Technical Requirements for Contactless Reader Terminals for Mobile Payments Based on 2.45GHz RCC (Limited Area Communication) Technology”. As the RCC standards approach to establishing a national standard, the industry ushered in a breakthrough opportunity. Valuation and recommended sales revenue increased and cost control capabilities improved. The 2016/17 EPS forecast was increased by 5.0%/6.6% to 0.24 yuan/0.32 yuan, respectively. At the same time, the target price was raised by 7.3% to 18.3 yuan, based on 63 times the price-earnings ratio for the next 12 months. Maintain a neutral rating. It is difficult for risky R&D investment to obtain the expected return on products, and the promotion of mobile payment and financial ICs falls short of expectations.