The 2017H1 performance was in line with expectations, and Xinshida announced 2017 H1 results: operating income of 1,623 billion yuan, up 57.77% year on year; net profit attributable to parent company was 99.19 million yuan, up 9.62% year on year, corresponding to earnings of 0.16 yuan per share. Profit statement: Financial expenses increased by 119.87% year on year, mainly due to increased bank loans. The company's engineering business takes up a lot of capital. It is expected that with the issuance of convertible bonds, the company's financial expenses are expected to improve. Balance sheet: The company's goodwill increased by about 340 million yuan to 1,463 billion yuan in the current period, mainly due to the current acquisition of Mountain Intelligence Control. At the same time, the company's long-term loans increased by about 300 million yuan, short-term loans increased by about 100 million yuan, and the balance ratio increased by about 10ppt to 49% from the beginning of the period. Cash flow statement: The company's operating cash flow expenditure increased 763.22% year on year, mainly due to the growth in the robot and motion control system business and the increase in advance payments for raw materials. The development trend is that the gross margin of elevator products is stabilizing. In the early stages of the market, the main concern was that the company's elevator business would continue to decline. At present, with the recovery of the newly started housing area in the early stages, the company's elevator control business, energy saving, and industrial transmission business has stabilized, and it is expected that the gross margin level will remain stable in the future. The robotics and motion control business has become the company's main business. 1) Xiaoao Xiangrong achieved a net profit of about 23.31 million in the first half of the year. With the approval and issuance of convertible bonds, there is still a possibility that future performance will exceed expectations. 2) The sales of robot bodies exceeded 1,000 units in half a year, and it is expected that the target of 1,600 units will be exceeded throughout the year. 3) The acquisition of Zhishan Intelligent Control perfects the layout of the servo system. Zhongweixing's main advantage lies in motion control software, and is optimistic about the synergistic effects of Zhishan Intelligent Control after the acquisition. The profit forecast is taken into account by Mountain Intelligence Control. We raised the earnings per share forecast for 2017 and 2018 by 4% and 4% from RMB 0.32 and RMB 0.37 to RMB 0.33 and RMB 0.39, respectively. Valuation and recommendations Currently, the company's stock price corresponds to 2017/2018 P/E 34.2x/29.1x. We maintain our recommended rating and target price of RMB 16.00, which is 42.73% higher than the current stock price. (The target price corresponds to 2017 P/E 49x; the industry average is 41x. As a motion control leader, the company enjoys a certain valuation premium.) The integration of risk acquisition assets fell short of expectations, and the negative impact of the decline in production in the elevator industry exceeded expectations.