1. Overview of the incident The company released its 2015 interim report: 2015 H1 achieved operating income of 86 million yuan, a year-on-year decrease of 15.4%; net profit attributable to shareholders of listed companies was 0.1 million yuan, down 28.8% from the previous year; EPS was 0.49 yuan; it is planned to increase 5 shares for every 10 shares of all shareholders using capital reserves. 2. Analysis and judgment of the growth rate affected by the bus industry. The company achieved operating income of 86 million yuan in 2015, down 15.4% year on year; net profit attributable to shareholders of listed companies was 31 million yuan, down 28.8% year on year. By product, sensors performed better, and 2015 H1 revenue increased 11.3% year over year. The negative year-on-year increase in the company's 2015 H1 performance was mainly due to: 1) the company's products mainly supporting large and medium-sized buses, such as CAN bus control systems, ECU controllers, sensors, instruments, etc., and the sales volume of the large and medium passenger industry fell 4.6% during the period; 2) it did not receive the 2014Q4 VAT refund of 3.8851 million yuan during the reporting period, and all government technology subsidies from the previous period have been carried over. The profit margin remained high and the gross margin increased by 57.8%, an increase of 1.4 percentage points over 2014 H1; the net profit margin was 35.7%, down 6 percentage points from 2014H1. The company's profit margin remains high, mainly because the company is the leader in bus CAN buses and ranks first in market share. The high quality of customer resources and the small-batch and customized characteristics of the bus industry guarantee a high profit margin. The company's 2015 H1 sales expense ratio was 6.1%, up 1.3 percentage points from 2014 H1; management expenses ratio was 11.6%, up 2 percentage points from 2014H1. The increase in the sales expense ratio was mainly due to the increase in overseas service engineers; the increase in the management expense ratio was mainly due to the increase in the cost of IPOs during the reporting period. Future growth mainly comes from the increase in the CAN assembly rate of buses and the extension of products to trucks The company's future growth will mainly come from: 1) bus business: future growth will stem from steady growth in the bus industry and increase in the assembly rate of CAN bus control systems; 2) Active expansion into the truck sector: the assembly rate of domestic truck CAN bus products is about 10%, which is still mainly monopolized by foreign investors. The company's products have price and other advantages, and will gradually extend to the truck business; 3) Demand for new energy vehicles will further boost CAN bus demand: the assembly rate of CAN bus control systems for new energy vehicles is 100%; 4) The connected bus market space is large: The automotive electronics technology research and development center, one of the company's fund-raising projects, uses the connected car cloud computing service platform system as a key development project 3. Profit forecasting and investment suggestions The company is an automotive electronics investment target. It is optimistic that the company's bus CAN bus control system will benefit from increased assembly rates, and the product is expected to expand to trucks, new energy vehicles, etc. Based on undiluted share capital, EPS is estimated to be 1.10 yuan and 1.33 yuan respectively in 2015 and 2016, corresponding PE is 51 times and 42 times, maintaining a “highly recommended” rating. 4. Risk warning: The penetration rate of automotive electronics is lower than expected; the commissioning progress of the fund-raising project does not meet expectations.