1H15's performance fell short of expectations. The company 1H15 achieved operating income of 1,868 billion yuan, YoY +0.31%, net profit of 92 million yuan, YoY -9.21%, or EPS of 0.28 yuan, which is at the lower end of the performance forecast, lower than our expectations. Revenue from Minbang products fell 33.81% year on year to 529 million yuan, gross margin fell 1.19 percentage points. Due to the sluggish economic situation, mining operations were insufficient, and product market demand declined; after product prices were liberalized, prices fell due to fierce market competition. The revenue from blasting projects increased 26.86% year-on-year to 1,265 billion yuan, and the blasting company optimized its business structure. The development trend is the integration of poly and civilian assets, and the reform of state-owned enterprises continues to advance. Poly Group's acquisition of Panjiang Chemical is expected to be completed within the year, and promises to inject it into the listed company within 24 months. The three civilian explosives assets under the Poly Group will also be injected into listed companies in the future. At that time, Jiulian Development's industrial explosives production capacity will reach 442,500 tons, the largest in the country. As a platform for integrating the assets of the Poly Group, the company will further increase the concentration of the domestic civil explosion industry in the future. The subsidiary Xinlian Blasting will invest 35.65 million yuan to obtain 51% of the shares in Liupanshui Jiuxiang, which is the second largest user of civilian explosion equipment in Guizhou Province, and its related enterprises, further enhancing its competitiveness in the local market and contributing to the development of integrated blasting services. The fixed increase matters are being reviewed by the Securities Regulatory Commission. It is proposed to issue no more than 182 million shares to 10 specific targets at a price of 1,634 yuan/share, with a lock-up period of 3 years, and raise no more than 3 billion yuan to repay interest-bearing debts and supplement working capital. Among them, the majority shareholders Poly Jiulian Group and Poly Investment promised to subscribe for 1 billion yuan. Profit forecast adjustments are due to falling demand and prices for civilian explosion products, and several blasting projects in the second half of the year. Construction projects are progressing slowly and profit margins are narrow. The company expects net profit YoY-40 to -10% from 1 to 3Q15. The 15/16 EPS forecast was lowered by 45%/22% to 0.53 yuan/0.84 yuan (0.34 yuan/0.54 yuan after dilution), respectively. The valuation and proposed current stock prices correspond to 47 times/30 times P/E in 15/16, respectively. Optimistic about the subsequent consolidation of Poly Group's Minbang assets, the target price was raised by 4% to 30 yuan, corresponding to 36 times P/E in 16 years. Maintain a “Recommended” rating. Risk Poly Group's asset injection process fell short of expectations; demand for the explosion declined further.