Key investment events: The company released its 2017 interim report. In the first half of the year, the company achieved revenue of about 470 million yuan, down 6.40% from the previous year; net profit was about 29.8 million yuan, a year-on-year decline of about 29.8 million yuan. There are losses due to seasonal factors, and the company's fundamentals are still improving: the company's financial situation over the years usually has a relatively obvious seasonal effect. There were many losses in the first quarter, slight profits or small losses in the second quarter, and the third and fourth quarters were the main profit quarters. This seasonal effect is related to the fact that some customers are used to confirming revenue in the second half of the year, and that the company's comprehensive energy saving business itself is seasonal. The company maintained a loss level similar to last year in the first half of this year. There were no major changes in fundamentals, and various businesses were actively developing. Traditional business lines have remained stable, and new business lines have gradually reduced losses: In terms of traditional business lines, China's demand for 4G network construction and supporting computer room construction has slowed. As a communication power supply business, there has been a certain decline, but it has maintained its top three positions in the market. In terms of new business lines, the company is actively expanding the market, reducing costs, and gradually becoming profitable. 1. New energy vehicle business. The company formed a professional team to successfully develop two motors and drive systems with different power levels. The motor efficiency is at the advanced level in China, and the vehicle battery products have also achieved product definition. The company has signed cooperation agreements with top domestic automakers and plans to achieve mass market entry of products in 2017. 2. The company has invested huge R&D capital and R&D strength in recent years to develop new businesses such as the DC power supply business line, secondary battery business, and general electric business line, which has gradually reduced losses this year, and is expected to achieve profit. The overseas layout continues to advance and is expected to become an important growth point for the company: in 2017, the company will further expand its overseas business layout. 1. The company's research site selection and plant construction in India is expected to be completed this year, which will greatly increase the company's overseas production capacity and supply capacity, and rely on Indian subsidiaries to reach the Southeast Asian market; 2. It is expected to expand sales in the European and American markets; 3. In the second half of the year, the company will deploy local offices in Cambodia, the Philippines, Vietnam, Esse, Mexico, etc., and continue to expand markets in various regions through localization; 4. Determine multiple products, multi-channel marketing strategies, and actively explore overseas markets. We expect that the company's overseas business revenue in 2017 will increase by more than 50% compared to last year. Profit forecast and investment rating: The company's 2017-2019 EPS is expected to be 0.10 yuan, 0.17 yuan, and 0.23 yuan, corresponding to PE 79/45/34 X. We are optimistic about the company's development in overseas markets and the increase in revenue and profit brought about by the NEV product line, and give it a “buy” rating. Risk warning: The development of the communication power supply industry falls short of anticipated risks, overseas business development falls short of expected risks, mass production progress of new energy vehicle motor drive system products falls short of anticipated risks, and customer development of new energy vehicle business falls short of anticipated risks.