Event: On August 20, the company released its 2017 interim report: the first half of the year achieved operating income of 563 million yuan, an increase of 42.1% over the previous year; net profit of 57.17 million yuan, an increase of 65.8% over the previous year; net profit attributable to shareholders of listed companies is expected to be 91.0364 million yuan to 115 million yuan in the first three quarters, an increase of 50% to 90% over the previous year. The company's revenue and net profit grew rapidly, mainly due to the company's front-loading business volume and the combined contributions of Sanqi Communications and Inca Technology. Since the merger on April 1, Sanqi Communications has revenue of 92.32 million yuan, net profit of 12.96 million yuan; Inca Technology has revenue of 5.87 million yuan, net profit of 3.6 million yuan. Together, the two accounted for 17.4% of the company's total revenue. Excluding merger factors, the company's revenue for the first half of the year was 458 million yuan, up 17.3% year on year, and net profit was 47.69 million yuan, up 17.8% year on year. The growth rate is still at a high level. This is mainly due to the company's steady expansion in the aftermarket and rapid penetration of multiple products in the front-loading market. The company's gross margin increased steadily, and the increase in the cost ratio for the period was due to the increase in R&D expenses after the merger. The gross profit margin of the company's automotive electronics business in the first half of the year was 31.1%, an increase of about 1.3% over the same period last year. Among them, the gross margin of intelligent CID series products, which account for nearly 30% of total revenue, increased by nearly 1.1%, driving up the company's overall gross margin. The cost ratio for the period rose slightly to 20.1% from 19.6% in the same period last year, mainly due to a significant increase in R&D expenses after the merger, which led to a 48.7% year-on-year increase in management expenses. Under the trend of intelligent automobiles, the company's new products are expected to experience a sharp rise in volume and price. The smart cockpit and LCD dashboard will be an important source of future growth. The value of smart cockpit bikes is 2 to 3 times higher than that of traditional motorcycles, and the gross margin is also higher (around 35%). They are expected to be launched on the market in October this year. The company invested in the construction of an LCD instrument panel production line in August this year in an effort to seize the high-end LCD instrument panel market. Profit forecast and investment advice: The company's EPS is expected to be 0.47 yuan, 0.66 yuan, and 0.87 yuan respectively from '17 to '19, maintaining the “increased holdings” rating. Risk warning: The slowdown in downstream automobile sales has had a negative impact on the company's product shipments.