Key investment events: On the evening of July 27, Century Dingli released its 2017 semi-annual report. Operating income for the reporting period was 334.36 million yuan, the same as the same period last year; net profit attributable to shareholders of listed companies was 72.7517 million yuan, up 35.89% year on year, due to disposal of shares in Nanjing Yunchuang Big Data Technology Co., Ltd.; non-net profit attributable to shareholders of listed companies withheld 34.023 million yuan, down 28.48% year on year. The scale of the communications sector was reduced during the reporting period, and gross margin remained stable: the I CT business focused on effectively allocating resources and improving overall efficiency; the instrumentation business benefited from the increased construction of CA and VOLTE by operators; the network service business, which was affected by the budget cuts of operators in various provinces, declined to a certain extent; in the big data business, the scale of the public security system's big data business increased rapidly. During the reporting period, the revenue of the communications sector was 175 million yuan, down 19.7% year on year; gross margin was 37.71%, down 0.55%. The education sector has expanded in size, and gross margin has declined slightly due to expansion. The company continues to vigorously promote the construction and layout of Dingley College, and to increase capital in Ganomunde to enter IT skills training. During the reporting period, the education sector's operating income was 141 million yuan, up 21.61% year on year; gross margin was 49.29%, down 6.71%. The education business is on the path of upgrading, and the later stages are worth looking forward to. In terms of “quantity” logic, the company's acquisition of Jianomunde and expansion of Dingli College can attract more students: on the one hand, Jianomunde is deeply involved in vocational education fields such as programming, artificial intelligence, and VR/AR, which complement Dingli University, and its human resources business can cover an increasing number of people; on the other hand, the Sino-German Dingli University has more than 1,000 people, which is double that of Dingli College in the previous period. The newly established Big Health, Internet +, automobile rail traffic majors and overseas exchange and learning mechanisms will enhance the appeal of the program. According to the logic of “price,” the tuition fee for the newly established Sino-German Dingli University is 16,000 yuan, and the share rate is over 62.5%. Compared with the tuition fees of 0.8 to 12,500 yuan and the 50%-60% share rate of the former Dingli University, there is an increase in tuition fees of 0.8 to 12,500 yuan and a share rate of 50%-60%. Profit forecasting and ratings: The company continues to promote the dual-main business model, entering the IoT field through the acquisition of “one core intelligence” and improving the industrial chain layout, bringing synergy to IoT vocational education; holding Jianomunde further improves the vocational education layout, which is expected to revitalize existing resources. We are firmly optimistic about the short-term increase in demand for educational equipment and the medium- to long-term integrated development of the company's vocational education resources. The prospects for the dual main business model are promising. The company's EPS in 17-19 is expected to be 0.32, 0.43, and 0.55 yuan respectively, corresponding to the current stock price PE of 31 times, 23 times, and 18 times, maintaining the “increased holdings” rating. Risk warning: the synergy of vocational education is not ideal, the acquisition and integration process falls short of expectations, and payback falls short of expectations