Guide to this report: The company's performance loss for the first quarter has narrowed. Since demand for Internet Premium services has not yet been released, the company will still lose money in the first half of the year, but the magnitude will narrow. In the medium to long term, we continue to look forward to the company's transformation into the field of virtual old-age care. Investment points: Maintain the “increase in holdings” rating, with a target price of 11.2 yuan. Aowei Communications's quarterly report and losses for the first half of the year have narrowed markedly, and the main business is gradually bottoming out. We maintain the 2014-2015 EPS of 0.15/0.22 yuan, and the target price of 11.2 yuan, respectively, and maintain the “increase in holdings” rating. Losses in the first quarter and first half of the year narrowed. The company released a quarterly report. Q1 achieved revenue of 62.2 million, an increase of 11.7% over the previous year, and a net profit loss of 7.19 million yuan, which is a decrease from the same period in '13. At a time when demand in the network optimization industry is “out of touch”, the company has achieved positive revenue growth through transformation and development. Among them, demand for products such as radio frequency devices, antennas, and tower amplifiers is growing vigorously, yet NetSmart services have not yet been launched. At the same time, the company predicted losses of 120-17 million for the first half of the year, and losses continued to narrow in the Q2 quarter. Cost control is showing results. When the main business was sluggish, the company strengthened control over expenses. In the quarterly report, its management expense ratio dropped sharply by 10.3 percentage points. We judge that in the next few quarters, there is still room for the company's management and sales expenses to decline. At the same time, considering the differences between traditional online optimization services and virtual pension services, the company will also focus on cost management. We are still waiting for the number of elderly care users to increase. As a transformation leader among network optimization enterprises, the company's layout in the field of virtual old-age care is highly forward-looking. In response to China's unique “9073” old-age care pattern, it is imperative to raise the level of informatization of home care, and there is huge space in the virtual old-age care market. The virtual nursing home model launched by Aowei after integrating resources from the Aging Commission and operators has been implemented in places such as Tianjin, Nanjing, Gansu, and Hainan. With the enrichment of service content and increased marketing efforts, the number of users of virtual pension platforms is expected to increase, and services that can be expanded later, such as e-commerce for the elderly, will become an important direction for company transformation. Risk warning: Competition in the old-age care business is intensifying; operators' network optimization promotion process falls short of market expectations.