Incident: On August 9, the company announced that in the first half of the year, it achieved operating income of 487 million yuan, an increase of 23.3% over the previous year, operating profit of 100 million yuan, an increase of 45.4% over the previous year, and net profit of 75 million yuan, an increase of 28.1% over the previous year. Q2 performance is in line with expectations, and profit growth is still steady: the company currently has a market share of about 1%. Adhering to the “safety inventory+production plan” procurement policy and the “market-based production” production model, the company's early procurement of base oil and other raw materials with high Q1 prices had an impact on Q2 performance. The overall H1 performance is in line with expectations. In the face of a sharp increase in income tax, the company's performance maintained a steady growth trend; excluding the impact of income tax, the industry growth rate can reach 45%. In the future, the company will continue to insist on applying for tax benefits to remove barriers to performance growth. Diesel engine oil became an important breakthrough, and the new plant helped H2 performance: H1 performance growth mainly depended on the deepening and expansion of sales channels. In the first half of the year, a number of influential events such as “Diesel Engine Disassembly” training were held, and advertising expenses increased by 30.7% over the same period last year. Since diesel engine oil terminal consumption habits pay more attention to cost performance factors, the company's market share in this field is expected to be the first to break through. The new plant was officially put into operation in July. The Huangdao plant is designed to have a production capacity of 80,000 tons of lubricating oil, 20,000 tons of antifreeze, and 2,000 tons of brake fluid in a single shift. The overtime and three-dimensional storage can be adjusted up to 150,000 tons, and the production capacity is highly flexible. Q3 The peak season for lubricants and antifreeze is getting closer, and there is little risk of a recent rapid decline in raw materials. It is expected that sales growth will continue to improve performance. Investment advice: Considering the impact of income tax, we expect the company's net profit attributable to shareholders of listed companies in 17-19 to be 1.60, 2.12 and 244 million yuan respectively, corresponding to EPS of 0.80, 1.06 and 1.22 yuan. The company's lubricants have a market of nearly 60 billion yuan, a low market share of 1%, and there is room for improvement. We are optimistic about future growth and maintain a buy-A investment rating of 30 yuan. Risk warning: large fluctuations in raw material prices, etc.