Key investment points benefited from the acceleration of diamond line replacement, and revenue/net profit increased sharply year-on-year, in line with our expectations. The company achieved revenue/operating profit/net profit to mother of 88.99 million/21.53 million/19.22 million yuan, up 36.89%/47.12%/40.66% year on year, minus 50.57% year-on-year increase, and operating cash flow of 122.37 million yuan, up 107% year on year, in line with our expectations. The revenue for electroplated diamond wire/diamond grinding wheel was 72.13 million/12.41 million yuan respectively, +41.51%/+25.18% compared with the same period last year. As diamond wire+black silicon technology continues to mature, it is rapidly penetrating into polycrystalline silicon chip applications, and demand in the diamond wire market is growing rapidly. Thanks to the development of the industry, orders were sufficient in the first half of the year, revenue scale rose rapidly, and performance increased quarterly. It is expected to continue to grow in the third and fourth quarters. The scale effect is beginning to show, and profitability is rising. The company's 2017 H1 comprehensive gross margin/net margin was 45.42%/21.60%, -4.08/+0.58 pcts year on year, and Q1-3.45/ -2.73 pcts month on month. Among them, the gross margin of electroplated diamond wire/diamond grinding wheel was 41.28%/68.05%, respectively, -2.56/ +0.48pcts. The decline in the gross margin of diamond wire was mainly due to falling prices, but we believe that with the surge in demand for diamond wire from polycrystalline silicon cutting, the shortage of supply in the third and fourth quarter will lead to a steady rise in price, and the gross margin rebounded in the second half of the year. The company's sales/management/financial expense ratios were 3.75%/15.17%/0.45%, respectively, -1.00/-0.92/+0.26pct, and -0.80/+0.91/+0.06pct month-on-month. As the scale increased, the company's sales expenses did not change much, and management and financial expenses were well controlled, reflecting the advantage of scale, so the net interest rate has increased, and the effect of continuous scale expansion will gradually increase. The release of production capacity from the IPO in the third quarter welcomed a sharp increase in profits due to the supply gap. The company's IPO capital for “diamond wire saws with an annual output of 1 million km” has been secured, and production capacity will be released in the third quarter through early investment. Under the current trend of full use of diamond wire for polycrystalline silicon chips, the supply gap for diamond wire is huge, and the release of the company's production capacity in the third quarter of 2017 will make performance elastic. In addition, the new construction project added ultra-fine wire with a production capacity of 0.06mm-0.45mm is mainly electroplated diamond wire, which is the main line type for polycrystalline silicon chips, and has strong market competitiveness. We expect the company's production capacity to reach 1.47 million km/year in Q3 2017, with an annual output of about 1 million km, and conservatively estimated to contribute about 280 million/net profit of about 280 million/55 million yuan; in 2018, production capacity is close to 2 million km/year, which can contribute about 420 million/net profit of about 420 million/82 million yuan. Continue to advance in research and development to build core competitiveness. Forward-looking product development and innovation is the foundation for the company's long-term sustainable development. 2017H1 invested 5.33 million yuan in R&D expenses, an increase of 34% over the previous year, and has accumulated 40/7 authorized patents/newly applied patents (including 8/6 invention patents), and has achieved phased breakthroughs in key products such as reduction wheels, scribing knives, and CMP-DISK. Companies, including Diamond Wire, have always relied on independent research and development to stay at the forefront of industry development. R&D genes are the company's core competitiveness and the cornerstone of continuous growth. Risk factors: The speed of diamond wire replacement in the photovoltaic industry falls short of expectations, changes in industrial policy, etc. Profit forecasting and valuation. The company is one of the leading diamond wire companies in China. The diamond wire cutting industry has taken advantage of the rapid growth of Dongfeng PV. The company's IPO expanded production capacity in 2017, and the performance flexibility is huge. We maintain our forecast for 2017-19 net profit of 65 million/92 million/109 million yuan, 3-year CAGR of 42%, basic EPS of 1.66 /2.36/2.79 yuan, corresponding PE of 30/21/18 times; the valuation center of A-share comparable companies in 2018 is 22X. We are optimistic that the company's new business leading value will be given to the company 25XPE in 2018, corresponding to a target price of 59.00 yuan, maintaining a “buy” rating.