Guide to this report: The company achieved net profit of 70.84 million yuan (+4.7%) in 2017H1; due to the overall impact of the industry, the company's electronic control business was under pressure in the first half of the year. The recovery in NEV sales in the second half of the year will drive product sales and drive annual performance growth. Key investment points: Maintain an increase in holdings rating. The company released its 2017 semi-annual report. In the first half of the year, the company achieved operating income of 294 million yuan, an increase of 14.39% over the previous year, and achieved net profit of 70.84 million yuan to mother, an increase of 4.74% over the previous year. Maintain the company's 2017-2019 EPS of 0.99, 1.33, and 1.73 yuan. Considering that NEV emissions in the second half of the year will drive the company's electronic control business growth, maintain the target price of 40.81 yuan, corresponding to 42X PE in 2017, and maintain an increase in holdings rating. The downturn in the NEV industry affected the company's electronic control business, and a rebound in sales in the second half of the year is expected to rapidly drive growth. Affected by the overall downturn in the NEV industry, the company's NEV electronic control business revenue increased 16.41% year-on-year in the first half of the year, reaching 233 million yuan, and gross margin was 38.89%, down 7.23%. We believe that at present, the overall sales of new energy vehicles have improved markedly. In July, sales of new energy vehicles achieved 59,000 units and 56,000 units respectively, up 53% and 55% from the previous year; it is expected that bus sales will gradually return to the right track in the second half of the year, and new energy logistics vehicles will enter a stage of rapid growth, driving the company's electronic control product sales; at the same time, the company's new energy passenger vehicle products are also expected to become a new profit growth point for the company in the future. The industrial control recovery trend has not changed, and the company's inverter business is selling well. Driven by the overall recovery of the industrial control industry, the company's medium- and low-voltage inverters achieved revenue of 53.44 million yuan in the first half of the year, an increase of 14.36% over the previous year, and gross margin of 40.12%, a slight decline. The recovery of the downstream industry combined with industrial upgrading will continue to drive demand for industrial control products. As a leader in the industrial control industry, the company will directly benefit from this round of market recovery, and medium- and low-voltage inverters are expected to develop rapidly. Risk warning: New energy vehicle sales in 2017 fell short of expectations, and increased market competition led to a further decline in gross margin