Performance summary: in the first half of 2015, the company achieved operating income of 195.83 million yuan, down 25.56% from the same period last year; net profit attributable to shareholders was 4.14 million yuan, up 158.53% from the same period last year; and 2.48 million yuan was deducted from non-net profit, down 117.83% from the same period last year.

The decline in revenue is mainly due to changes in the scope, Henan thinking listing will greatly increase the performance. During the reporting period, the company's operating income declined significantly, mainly due to the transfer of 13.5% equity in Kunpeng Telecom, which earned 150.86 million yuan in the same period last year, which is no longer included in the consolidated table. Henan thinking IPO's application has been approved by the CSRC and is expected to be listed on the main board in the second half of this year, when the investment income will greatly increase the company's performance. The increase in gross profit margin reflects real profitability, and the situation of high expense rate suppressing net interest rate is expected to ease. During the reporting period, the overall gross profit margin was 31.90%, an increase of 8.41% over the same period last year, mainly due to the low gross profit margin of Kunpeng Telecom, a subsidiary in the past, and after it was no longer consolidated, the overall gross profit margin reflected the true profitability of the company's main products. During the reporting period, the expense rate during the period was 44.46%, an increase of 17.19 percentage points over the same period last year, suppressing the increase in the company's net interest rate. After the return of the company controller, the follow-up company management is expected to continue to improve, it is expected that the company's high expense rate to suppress the net interest rate will be alleviated, and the company's net interest rate is expected to continue to rise.

With the rapid growth of domestic RFID industry, the company's epitaxial expansion is expected to accelerate again. The domestic RFID industry is in a period of rapid development, with a market size of more than 30 billion and a compound growth rate of more than 30 per cent in the past five years. In the RFID application market, there are great differences in industry segmentation. If you expand on your own, it will take a long time and high cost. The company is well aware of the law of the development of the industry, and since its listing, it has begun to open up new markets with the help of the capital market, and then restricted by the problem of the actual controller, the expansion has slowed sharply in the past two years, and after the problem of the actual controller has been solved, the company's extension expansion is expected to accelerate again. Profit forecast and rating: the growth rate of net profit in 2015-2017 is expected to be 114.3%, 32.9% and 14.3% respectively, and EPS is 0.13,0.18 and 0.20 yuan respectively.

Risk tip: slow progress in new market expansion; management improvement is not as good as expected