Event: On August 17, the company released its 2017 interim report: operating income for the first half of 2017 reached 441 million yuan, up 297.5% year on year; net profit was 36.5 million yuan, up 138.3% year on year. On August 19, the company announced that it had joined Dahua Co., Ltd. to win a pre-bid of 390 million PPP projects in Ping'an City, Qimei County, Xinjiang. Orders for security projects continued to be placed, and revenue and profit increased rapidly. Facing the historic opportunities in the security industry, the company has shown strong order taking and delivery capabilities. The company achieved revenue of 441 million yuan in the first half of the year, an increase of 297.5% over the previous year, and net profit of 36.5 million yuan, an increase of 138.3% over the previous year. Among them, the security business contributed 327 million yuan in revenue, an increase of 761.29% over the previous year, accounting for 74.1% of total revenue. The decline in overall gross margin was due to an increase in the share of the security business, and the cost ratio declined significantly during the period. The company's consolidated gross margin for the first half of the year was 18.91%, down 4.65% from the same period last year. The decline in overall gross margin was mainly due to the rapid rise in the share of security services with relatively low gross profit. The company's period expense ratio fell to 6.7% from 10.9% in 2016, showing that the company has a good ability to control expenses during business expansion. The increase in preparations to accrue bad debts is mainly due to an increase in receivables. The company accrued 12 million yuan in the first half of 2017, accounting for nearly 30% of total profit. Considering that most of the bad debt preparations are accounts receivable within one year, and that most of the company's service customers are government agencies, there is little risk of repayment. A number of financial indicators confirm the high prosperity of the company's business. Under the dual wheel drive of endogenesis and epitaxial, the company will have more room for growth. The company's business volume increased significantly in the first half of the year, and various business indicators such as inventory and prepayment showed that the company's performance continued to improve. Profit forecast and investment advice: We are optimistic about the explosive nature of the company's security business. We gave the 2017-2019 EPS 1.03 yuan, 1.56 yuan and 2.40 yuan respectively, maintaining the “increase in holdings” rating. Risk warning: The implementation rate of the security project is lower than expected, and there is uncertainty about the acquisition.