The performance of the first half of the year continued to grow steadily: the company recorded revenue of 96.7 million US dollars in the first half of the year, an increase of 11.9% over the previous year; net profit attributable to shareholders of the parent company was 9.8 million US dollars, up 48.7% year on year. Various businesses are developing well, with integrated building automation systems increasing revenue by 12.4%, energy management system revenue increasing 19.2%, and industrial energy saving solutions revenue increasing 6.7%. The actual tax rate for the first half of the year fell to 16.4% from 33.4% in the first half of last year due to a decline in the share of profits from overseas businesses and the beginning of tax exemption policies for some businesses in China. The increase in business volume and the decline in the effective tax rate in the Chinese market were the main driving factors for the company's performance growth in the first half of the year. The overall gross margin remained stable, and the business structure was gradually optimized: Due to increased competition for building control products, the gross margin of the building automation system business in China and North America declined by 5.86% and 6.76% respectively in the first half of the year, but the gross margin of the energy management system and industrial energy saving business increased by 10.91% and 22.91%, respectively. The company completed the sale of Distech Controls in September. It is expected that in the future, the profit share of building control products will drop from the current 30% to less than 15%, while the share of energy management systems and industrial energy saving businesses with excellent growth capacity will increase. The acquisition of the parent company's intelligent business will bring good synergies: the company signed an agreement with the parent company at the end of July to acquire intelligent rail transit, intelligent buildings and smart city heat networks for 528 million yuan. The intelligent business of the target company is in a leading position in the industry. Among them, the intelligent rail transit business has now covered about 1,100 kilometers of subway miles, with a market share of 40%, while the market share of the smart city heat network business is as high as 60%. The entry threshold for intelligent rail transit and heat network services is high, and the current coverage rate is still low. With the advancement of urbanization, there is huge room for future growth. At the same time, the target customers of the company's comprehensive urban energy saving business effectively overlap with existing customers in the smart city intelligent business. It is expected that after the acquisition is completed, the strong customer base of the intelligent business will bring unprecedented opportunities to the integrated energy saving business. Maintaining a highly recommended rating, with a target price of HK$7.5: Demand for energy efficiency in China is rapidly expanding. As an industry leader, the company is optimistic about the company's endogenous growth and external mergers and acquisitions opportunities. Taking into account the one-time profit from the sale of overseas business and the acquisition of the parent company's intelligent business, the 2015 and 2016 EPS was increased by $0.162 and $0.066. Currently, the average PE value of the H-share energy saving and environmental protection industry in 2015 and 2016 is 15.19 times and 12.59 times respectively. We are optimistic about the company's future continued growth potential, giving the company a PE level of 5.95/14.66 times in 2015/2016, maintaining a target price of HK$7.5. The target price is 55.93% higher than the current price, maintaining a “highly recommended” investment rating.