Performance review The company's performance was in line with expectations. Hailian Jinhui announced 2017 interim results: operating income of 1,689 million yuan, a year-on-year increase; net profit attributable to the parent company of 178 million yuan, an increase of 216.64% over the previous year, corresponding to a profit of 0.14 yuan per share. The company expects the net profit range for the first three quarters to be 100 million yuan, an increase of 162% to 212% over the previous year. The main reason for the sharp increase in performance due to joint advantages is the main reason for the sharp increase in performance, but the company exceeded expectations in terms of progress in third-party payment and big data business, and maintained recommendations. Trends The third-party payment and big data business has doubled. The high growth rate continues, and the consumer finance business can be expected. (1) Third-party payment business revenue in the first half of the year reached 221 million yuan, with transaction volume exceeding 750 billion yuan, an increase of 99% over the previous year; among them, mobile payment transaction volume ranked 4th in the first quarter according to iResearch, and bank card transaction volume ranked 26th (6.4 billion yuan) in May. The company has also made great progress in cross-border payments and is expected to enter the top 5 in the foreign exchange settlement business. (2) The big data business has achieved revenue of 47 million yuan, which is more than last year. Relying on data resources and efficient IT platforms, it provides intelligent risk control services to dozens of financial institutions. The gross profit of this business is as high as 92.69%, and it will become an important source of profit in the future. (3) The mobile information service business achieved revenue of 106 million yuan, and sent more than 100 million text messages in the first half of the year, an increase of 31% over the previous year; the mobile operator billing and settlement business achieved revenue of 100 million yuan, a significant increase over last year. (4) The consumer finance business is about to be launched. In the future, Bochen Small Loan and Lianniu Small Loan can achieve a loan balance of about 600 million yuan (1.5 times leverage ratio), which is expected to contribute more performance with the support of corporate payments and big data risk control. The parts business has been smoothly transformed, and revenue has rebounded markedly. (1) Auto parts focuses on the passenger car and special vehicle markets, with revenue of 773 million yuan, an increase of 7.21% over the previous year. (2) Home appliance accessories focus on high-margin business, with revenue of 283 million yuan, a year-on-year increase of 37.81%, and gross margin increase of 2.18 percentage points. (3) The revenue of motors and accessories was 116 million yuan, an increase over the previous year. Product development extended from high-efficiency inverter motors to the automotive motor product field. The profit forecast slightly raised the 2017/2018 net profit forecast to 466/580 million yuan, an adjustment of 2.0%/0.1%, considering that the progress of the company's payment and data business exceeded expectations and the recovery of the parts business. Fully diluted net profit per share was $0.37/0.46, up 99.9%/24.7% year on year. Valuation and recommendations Currently, the company's stock price corresponds to the 2017e P/E 32x. Maintaining the recommended rating, considering that the company's annual equity distribution excludes the share price, the target price was adjusted year-on-year to 16.45 yuan, which is 38.58% higher than the current stock price. Risks (1) the progress of the Internet finance business falls short of expectations; (2) the transformation of the parts business is blocked.