Event: 2017 H Zhongyuan Securities achieved operating income of 840 million yuan (YoY -12.5%), net profit of 170 million yuan (YoY -46.6%), and net assets of 101 billion yuan (YoY +31%). The weighted average ROE is 1.27%, and the leverage ratio is 2.77 times. We believe that the company's core marginal changes include: (1) the overseas business surged 3 times year on year from the four-fold increase in overseas business revenue in 2016, and is in a period of rapid growth; (2) the brokerage business and proprietary business fell short of expectations, and capital cost reductions drove a 20% increase in net interest income; (3) the company continued to lay out diversified finance and plan to establish Zhongyuan Life (Insurance) and Zhongyuan Asset Management (AMC), and licenses are becoming more complete. Optimize the layout and actively transform, and reduce capital costs. (1) Market performance declined modestly, and wealth management transformation was promoted. In 2017, the net brokerage fee revenue of Company H was 260 million yuan (YoY -33%). Looking at the breakdown, the company's stock trading volume market share fell to 0.55% compared to the end of 2016, mainly due to increased competition in brokerage business in Henan Province in recent years; the net commission rate fell slightly to 4.1 per 10,000, and the decline slowed down. After the A-share listing to supplement capital, on the basis of maintaining local advantages in Henan, the company continued to optimize and expand the scope of branch services, actively shift to wealth managers, and carry out high-rate investment advisory services, which helped improve the situation where both the company's share and commissions declined. We expect the company's brokerage business market share to stabilize at around 0.55%, and the net commission rate to remain at a high level of 4/10,000. (2) Capital costs have declined, and stock pledges have continued to rise. In 2017H, the net interest income of the company achieved a 20% year-on-year increase. From the expenditure side, the decline in debt costs was the main reason for the increase in the company's net interest income. After the company completed equity financing at the beginning of the year, the capital costs were expected to remain low; from the revenue side, the company's stock pledged repurchase balance rose to 2.55 billion yuan (YoY +7.4%) while the balance of the two finance companies declined, and the remaining interest income was basically the same. Overseas business grasped opportunities and achieved further success. 2017-H Zhongzhou International grasped the development opportunities of the recovery of Hong Kong's capital market in the first half of the year. On top of the four-fold increase in overseas business revenue in 2016, the year-on-year increase was three times, achieving operating income of 0.7 billion yuan. Hong Kong subsidiaries take advantage of the company's extensive customer base, expand business marketing systems, actively explore business models and profit models that meet their own development characteristics, and achieve a doubling of overseas business profits. In the future, Hong Kong subsidiaries are expected to have a synergistic effect with mainland business and further enhance their operating strength. Self-management needs to be improved, and asset management is piling up. (1) Self-employment needs to be improved. The A-share market and bond market were volatile in the first half of 2017, and the company achieved self-operated investment income (including changes in fair value but not including investment income in associated enterprises) of 106 million yuan (YoY -25%), which needs to be improved. Corporate equity and bond investments continue to prioritize risk and actively adjust to market fluctuations. The company's yield is expected to pick up in the second half of the year. (2) Weak accumulation of asset management. The company's asset management business revenue was 300 million yuan (YoY +63%), and the 2017 H asset management scale was 162 billion yuan, up 36% from the beginning of the year. Among them, pooled asset management accounted for 28% of the total asset management scale and 77% of revenue. The company's current overall asset management scale is still low. As the company's capital replenishment and wealth management transformation progress, the asset management business has high potential for growth. The entire industry chain integrates resources, and the financing needs of enterprises in Henan are high. In 2017, H achieved investment banking business revenue of 0.2 billion yuan (YoY -75%), mainly due to a sharp decline in the company's underwriting projects compared to the same period. The company links a large number of micro, small and medium-sized enterprises listed in the Central Plains Equity Center with businesses such as financing, direct investment, new third board listing, market-making business, company transfer, refinancing after transfer, and equity pledge financing, forming a “six in one” industrial chain, generating business synergy effects. There are 1,352 listed enterprises in the Central Plains Equity Center, with abundant potential project reserves. As of the end of 2016, the securitization in Henan was only 22.5%, far below the national average of 68.2%. The Henan provincial government clearly proposed in the 13th Five-Year Plan to improve the province's low securitization rate, encourage local enterprises to go public and finance, and reinforce the Securities Regulatory Commission to strengthen capital market construction, bringing more room for development to the company's investment and banking business. Actively expand capital and have a comprehensive and diversified layout. The company's net capital and net asset rankings in 2016 were only 42 and 43. Capital supplements are urgently needed to improve performance. After the A-share listing, Zhongyuan Securities's financing channels were further broadened. The company's 2.7 billion yuan convertible bond plan has been accepted by the Securities Regulatory Commission. The capital supplement will drive further improvements in the business structure and help the company's performance to improve significantly. On the other hand, in the future, the company will accelerate the deployment of diversified financial sectors, with increasingly complete financial licenses, covering futures, equity centers, venture capital, and planning to establish insurance subsidiaries and AMC subsidiaries. In the future, it will cooperate at home and abroad in financial advisory business, investment business, and securities brokerage business. Investment advice: Buy-A investment rating, we expect the company's 2017-2019 EPS to be 0.13 yuan 0.15 yuan and 0.2 yuan, with a six-month target price of 12.59 yuan. Risk warning: market downturn risk, business mismanagement risk, credit default risk