Key investment events describe Jiugang Hongxing's performance forecast for the first half of 2016. During the reporting period, the company achieved net profit attributable to shareholders of listed companies of 227 million yuan; according to the latest share capital calculation, EPS was 0.04 yuan in the first half of 2016, EPS was -0.25 yuan for the same period last year, and EPS was -0.04 yuan for the first quarter. Incident review: Strong steel mining boosted smelting profits, turning a loss into a profit in the first half of the year: the company's main products were wire and bar, and the growth rate of real estate and infrastructure investment recovered since the beginning of the year, leading to an improvement in downstream demand in the industry. Combined with low supply and inventory levels, the overall price performance of ore in half a year was relatively weak: 1) Since 2016, the average price of rebar and wire in Lanzhou has continued to rise. The average quarterly price of rebar increased 14.86% year on year in the second quarter, and wire prices increased 13.17% year on year; 2) Although the same mineral prices increased by 13.17% year on year; 2) Although the same mineral prices had some share picked up, but Q2 still fell year over year 7.41% Under the weak pattern of strong steel and mining, the company's profit increased significantly in the first half of the year, successfully turning a loss into a profit. On a month-on-month basis, the improvement in the company's performance in the first half of the year was mainly due to a sharp improvement in performance in the second quarter: at the end of April, rebar and wire prices in Lanzhou reached annual highs of 3,250 yuan/ton and 3,200 yuan/ton respectively. The company's gross profit corresponding to a ton of steel was once close to 1,000 yuan. Even though steel prices have declined since the beginning of May, it still has a certain advantage over the same period last year. In the end, the company achieved net profit of 494 million yuan and EPS of 0.08 million yuan in the second quarter. With the company's loss of 267 million yuan in the first quarter, the semi-annual results successfully turned red. It is expected that the “Belt and Road” will contribute more to the company's performance: Overall, although current industry profits have improved and subsequent performance has improved substantially, it will still depend on the continued recovery of overall downstream demand in the industry. The gradual implementation of the “Belt and Road” plan will enable the company to show its location advantage along the Silk Road, thereby consolidating the foundation for long-term improvement in the company's performance. The company's EPS is expected to be 0.05 yuan and 0.06 yuan respectively in 2016 and 2017, maintaining the “gain” rating.