Key investment points: 17H1 achieved net profit of 75.48 million yuan (YoY +28.08%), in line with our expectations. The company released its 2017 semi-annual report. 17H1 achieved operating income of 487 million yuan, a year-on-year increase of 23.29%, and net profit of 75.48 million yuan, a year-on-year increase of 28.08%. Among them, the sales volume of automotive lubricants reached 28,000 tons, contributing 434 million dollars in revenue, and the year-on-year sales growth rate reached 30.2%. 17Q2 performance declined month-on-month, and Q3 is expected to enter a peak season. Looking at a single quarter, the company's 17Q2 achieved operating income of 204 million (YoY +6.29%, QoQ -28.12%), net profit of 28.1 million (YoY -0.94%, QoQ -40.68%), and quarterly performance in the second quarter declined month-on-month, mainly because: 1. Some dealers in the first quarter prepared goods during the period of price increases and gradually digested inventory in the second quarter; 2. Compared with the second quarter, the first quarter had inventory income. Raw material prices rose in the second quarter, and gross margin declined slightly; the third and second quarters were the company's traditional off-season, and we think the third quarter was the company's traditional off-season, with antifreeze in the third quarter Sales of products will begin, which will lead to an increase in revenue. Excluding the impact of income tax, the 17H1 operating profit growth rate is still impressive. Since the company's income tax rate was raised from 15% to 25% in '17, 17H1 income tax expenses increased 143.15% year over year, while the company achieved operating profit of 101 million, an increase of 45.45% year over year (2016H1 operating profit growth rate was 23.57% year over year). Excluding the effects of income tax and other non-recurring profits and losses, the half-year year-on-year operating profit growth rate reached the highest (disclosed) since 2012. Heavy truck sales continue to be booming, providing support for subsequent demand. In 2017, H1 heavy trucks sold a total of 580,000 vehicles, an increase of 71% over the previous year. Heavy truck sales in July were 94,000 units, an increase of nearly 90% over the previous year. Currently, all major companies are producing at full capacity. The sharp rise in downstream heavy truck sales has supported demand for automotive lubricants. The cumulative effect has driven stock market growth. The company mainly positions the retail market in the automotive aftermarket. Historical performance is related to the boom in the heavy truck market, and may benefit from the boom in the heavy truck market for some time to come. The commencement of construction of the new Huangdao plant will bring about improvements in production capacity and quality. The Huangdao plant was put into operation in 17H2 and has an annual production capacity of 80,000 tons of lubricants, 20,000 tons of antifreeze, and 1,000 tons of brake fluid. We believe that the company's new plant not only brings a breakthrough in production capacity, but also the optimization of the entire production process, quality improvement, efficiency improvement, and deepening customer recognition. The company is expected to further open up the market by relying on the new plant and subsequent channel expansion. Profit forecasts remain unchanged, maintaining the “buy” rating: The company's performance has increased steadily since listing. Considering that the third quarter will usher in a peak season, the current high downstream boom, new factory operation, and improvements in the company's product marketing channels, etc., we maintained our 17-19 net profit forecasts of 160 million, 200 million and 254 million yuan, respectively. The corresponding EPS was 1.60 yuan, 2.00 yuan and 2.54 million yuan respectively. The corresponding share capital was diluted after stock release. The corresponding EPS forecasts were 0.80 yuan, 1.00 yuan, and 1.27 yuan respectively, corresponding to 17-19 PE is 31X, 25X, and 19X, respectively. We are optimistic about the company's growth and maintain a “buy” rating.