Key investment events: Electric Light Technology released its 2017 semi-annual report on August 21. During the reporting period, the company's revenue was 316 million yuan, up 25.72% year on year; operating profit was 243.13 million yuan, up 6.57% year on year; net profit to mother was 236.695 million yuan, up 19.19% year on year; non-net profit deducted from mother was 18.2616 million yuan, up 17.42% year on year; basic earnings per share were 0.07 yuan. The company's main manufacturing business is divided into two types of business. Revenue from explosion-proof electrical equipment for mining increased significantly. Power equipment developed slowly due to the cycle, and the overall revenue level increased 15.31% to 290 million yuan. Affected by the country's supply-side reforms and the removal of production capacity, coal prices have picked up, the performance of related enterprises has improved, and the company's mining explosion-proof products business has clearly rebounded. The subsidiary's explosion-proof electrical business rose sharply year on year, and sales increased by 48.75%. Among specific products, revenue from electromagnetic starters, high and low voltage feeder switches, and substations increased by 81.42%, 52.65%, and 122.49%, respectively, and corresponding operating costs increased by 83.83%, 54.95%, and 122.99% year-on-year. The gross margin level declined slightly year over year. The revenue and profit of the power equipment manufacturing sector declined, with revenue falling 32.39% year on year and gross margin falling 4.83% year on year. The main reason is that the power grid renovation project is cyclical. Currently, it has entered the phase of year difference, some supporting projects have not yet been completed, the products ordered by each grid last year have not yet been installed in the renovation project, and business volume has declined. The education industry is starting to gain strength, and profitability is about to be reflected. During the reporting period, the education industry's revenue was RMB 26.15,500, accounting for 8.23% of total revenue. The company acquired Yali Technology Company and Jiapeng Culture Company last year, invested 90 million yuan to acquire 100% of Yiwu Qiyu Company's shares during the reporting period, and quickly entered the international education and training market and high-end early childhood education sector. Yali Technology Co., Ltd. mainly targets the field of international education and training and studying abroad. It will add 2-3 new teaching sites in 2017. Due to investment in new school sites, enrollment fees and teacher reserve costs at the new school sites increased accordingly, and there was a temporary loss in the first half of the year. It is expected that student fees will gradually become profitable in the third quarter. Yiwu Qiyu Company and Jiapeng Culture Company mainly target the preschool education market and plan to integrate and expand early childhood education resources in the Jiangsu, Zhejiang and Shanghai regions. Yiwu Qiyu Company began to be included in the scope of the consolidation of the company's financial statements in May. Jiapeng Culture Company opened 2 new early education institutions in the first half of the year and is expected to start operation in September. Furthermore, during the reporting period, the company established a wholly-owned subsidiary, Shanghai Dianguang Education Technology Co., Ltd., to further occupy market share in the fields of international education and high-end early childhood education, and strengthen the management of the education industry sector. The main business has significant advantages, and the prospects for the education business are promising. The company's main business has competitive advantages such as leading technical level, leading scale, complete industrial chain, obvious brand effect, and effective management team. It has a high influence in the industry. It is one of the industry standard drafting units for explosion-proof mining equipment. It has a stable customer base and a trustworthy profit level. In the education business, the company began capitalized operations in the education industry earlier. After two years of accumulation, the team now has a certain foundation for the development of international education and early childhood education. The company invests in targets related to international education and study abroad through the Fengyu Education Industry Fund, and has now formed an “international education ecosystem” development model centered on Yali Technology. In terms of preschool education, the company has completed the acquisition of Shanghai Jiapeng Company and Yiwu Qiyu Company. Profit forecasting and risk rating: The company has a development tone of “consolidating the main business and two-wheel drive”. It will adhere to special equipment manufacturing and continue to maintain its leading position as an enterprise. As the power industry passes through the low cycle, profitability will further develop. In the education sector, endogenous and extrinsic methods are used to expand the current volume of education. As schools continue to open and tuition fees are collected, the profitability of the education industry can be expected. The company's EPS for 17-19 is estimated to be 0.17/0.20/0.25 yuan respectively, corresponding to the current PE price of 86/70/56 times, which is the first time it has been covered to give an “gain” rating. Risk warning: The macroeconomic economy is declining, the main business development is not as good as expected, and the effects of mergers and acquisitions integration are not as good as expected