The performance was in line with expectations (1) the company's revenue for the first half of the year was 324 million yuan, up 46.12% year on year; imputed net profit was 15.45 million yuan, down 52.27% year on year; (2) the company's gross margin decreased by 8.14 percentage points to 36.68%; (3) the company spent a total of 24.70.84 million yuan on mobile Internet projects in the first half of the year. Due to the large increase in wages and travel expenses, the company's sales expenses were 444.19 million yuan, up 34.52% year on year, and the cost rate decreased by 1.18 points to 13.65% ; Management expenses were 72.3 million yuan, an increase of 49.70% over the previous year, and the cost rate increased by 0.53 percentage points to 22.33%. Development trends In terms of traditional business, the market share of the company's intercom products has increased, and the amount of new contracts signed has declined slightly. (1) The completed residential area nationwide was 243.54 million square meters in the first half of the year. According to the calculation of 100 square meters/household, the market share of the company's intercom products was about 26.92%, up from 20.42% in the full year of 2014; (2) during the reporting period, the company signed 4,293 contracts, with a total contract amount of 411 million yuan, a decrease of 9.95% over the previous year. In terms of the transformation to mobile Internet, the company has increased its investment, and the implementation of new products and new business models has accelerated. (1) In the field of smart communities, Anju Doorman has completed the transformation and development of hardware, systems, and apps, and has completed hardware installations in 1,188 communities; personal bodyguards have completed product development and duty center construction, which can be used for cooperation with insurance, car and other industries; peripheral offers have completed the first phase of app development and store promotion. Currently, about 138,000 cooperative merchants have registered, and published more than 140,000 pieces of discount information; (2) In the field of smart parking, the Pocket App has completed development and entered the closed beta stage; Trial production of the video parking space guidance system has been completed; (3) In terms of business models, the company has developed innovative operating models such as dynamic preferential parking. The profit forecast was adjusted to maintain the company's EPS forecast for 2015 to 2016 at 0.27/0.34 yuan, respectively. Valuation and recommendations Maintain recommendations. Companies are stepping up efforts to transform to mobile Internet, and implementation of transformation has replaced performance as the core indicator for observing companies. Considering that the decline in investor risk appetite has led to a downward shift in the overall valuation center of the market, the company's target price was lowered by 50% to 17 yuan, and the recommendation was maintained. Risks (1) a sharp reduction in housing completion or new construction; (2) corporate transformation and community O2O market expansion fall short of expectations; (3) systematic sector valuation correction.