The 2017 mid-year report results are forecast to increase on the evening of July 10, 2017. The company announced that net profit due to mother for the first half of 2017 was about 150 million yuan, an increase of 360% over the previous year. Rand Zongheng Network, a new third board company invested by the company, completed additional distribution during the reporting period, generating investment income of 109 million yuan. Net profit increased 25.3% in the first half of 2017 without taking into account income from this investment. Upgrading and transformation companies from outside to inside are transforming from product agents to autonomous “cloud products+cloud solutions” with a full range of cloud services. Based on the experience of serving enterprise-level customers accumulated through years of cooperation with IBM, the company follows the trend to provide cloud computing services on top of the original IT needs of enterprise-level customers. Compared with Alibaba Cloud and Tencent Cloud, Huasheng Tiancheng naturally has the advantage of being familiar with customers and IT systems. The top 100 software ranking rose 17 places, and Huasheng Tiancheng ranked 38th in the 2017 “2017 China Top 100 Software and Information Technology Service Comprehensive Competitiveness Companies”. Huasheng Tiancheng is 17 places higher in the 2017 Top 100 ranking compared to 2016. The founder's increase of 300 to 600 million yuan reflects the management's confidence. The company announced on May 25 that within the next 12 months from the announcement date, Wang Weihang, chairman of the company plans to increase his holdings by 300 to 600 million yuan. According to yesterday's closing price of 8.87 yuan/share, the expected increase in holdings accounts for between 3% and 6% of the total share capital of 1104.4842 million shares. PB is below the average and median, 86% greater than the current PB as of July 10. The company's PB (TTM) is 2 times. The average historical PB (TTM) since the company went public is 4.36 times, and the median is 3.95 times. Huasheng Tiancheng's historical PB (TTM) was greater than the current PB for 86% of the time. Judging from PB's historical valuation, the company's stock price is at the bottom of history. Profit forecast and investment advice We forecast revenue of RMB 5.235 billion, RMB 5.937 billion and RMB 6.867 billion respectively from 2017 to 2019, increasing by 9.1%, 10.7%, and 11.2% respectively. Net profit was 200 million yuan, 206 million yuan and 301 million yuan respectively, up 464.2%, 1.9% and 46.3% respectively. The corresponding PE is 48.9 times, 48 times, and 32.8 times, respectively. Based on the above judgment, we give an increase in holdings rating for the first time covered. The risk suggests that the cloud computing business is not developing as expected, and competitor cloud services are replacing the company's business.