Key investment events: The company released its 2017 semi-annual report. In the first half of 2017, it achieved operating income of 810 million yuan, a year-on-year increase of 31.25%, and realized net profit of 553.14,200 yuan, a year-on-year decrease of 27.86%, and EPS of 0.06 yuan, a year-on-year decrease of 33.33%. The company consolidated its absolute leading position in the industry and achieved steady growth in overall business revenue. The company is a leading domestic polyester resin company for powder coatings. After the Huangshan Excalibur expansion was completed in '16, it currently has a production capacity of 150,000 tons. It is planned to finance an additional 50,000 ton polyester resin project in early '14. It is expected to be put into operation in the first half of 2018. The production capacity is expected to reach 200,000 tons, far exceeding the competition. The company currently has the highest market share in the industry, with sales volume of 127,000 tons in 2016, with a market share of about 27%. At present, the company is fully utilizing its production capacity, expanding its overseas business smoothly, and its market share is rising steadily. It is expected that the company's market share will exceed 30% during the 13th Five-Year Plan period, and its performance will continue to grow steadily, and stand out in the powder coating raw materials market. The company invests in upstream raw materials, and gross margin is expected to increase steadily. The company's upstream raw materials are PTA (refined terephthalic acid) and NPG (neoprene glycol), and the procurement costs of the two account for 40%-45% and 35%-40% of the company's main operating costs, respectively. In the first half of 2017, with the further implementation of the national environmental protection policy, the price of the main raw materials for the company's polyester resin products rose year-on-year. In the process, the increase in product prices lagged behind, and the overall gross margin of polyester resin declined, affecting the company's profit in the first half of the year. However, the company's shareholding subsidiary, Lihuayi Excalibur, has now successfully put into operation the 30,000 tons of neopentyl glycol (NPG) project, which can effectively reduce the company's costs and improve product quality, and effectively counter the risk of fluctuations in raw material prices. The Maanshan NPG project is expected to be put into operation in 18 years. Benefiting from the company's cost plus pricing mechanism and the subsidiary's raw material production, the company's gross margin will increase steadily. Downstream environmentally friendly powder coatings are still an application depression, and demand for polyester resins will continue to grow. The global environmentally friendly powder coating market volume in 2015 was US$8.71 billion, and the market forecast is a compound annual growth rate of 7.6%. China currently accounts for half of the market, but it is mainly used for exports. As countries and consumers pay attention to environmentally friendly materials, on the one hand, the proportion of powder coatings will increase. On the other hand, the application fields of powder coatings will expand to electronics, automobiles, furniture, etc. Demand for polyester resins will also continue to grow at a certain rate. We are optimistic that the company, as a leading enterprise, can also achieve high growth in an industry with a low growth rate and blossom in the desert. The acquisition of Jiaye Airlines and Zhongxing Weiye was completed, and the military sector expanded in an orderly manner. Following the acquisition of Jiaye Airlines, Jiaye Airlines completed the acquisition of 60% of Zhongxing Weiye's shares with its own capital. Zhongxing Weiye has perfect military quality and a high technical threshold, and the Beidou series products have a strong competitive advantage in their industry. Jiaye Airlines promised net profit not less than 31.5 million, 41 million, and 51 million in 15-17. Both 2015 and 2016 have exceeded their performance promises, and are expected to fulfill their performance promises in 2017. Through the acquisition of Jiaye Airlines and Zhongxing Weiye, the company quickly entered the fields of aerospace high-end equipment manufacturing and rail transit high-end equipment manufacturing with huge market space and higher profit levels. Currently, its main customers include China Aviation Aircraft, China Aerospace Science and Technology Group, and CRRC. Profit forecast and investment advice: Net profit of RMB 1.81/229/280 million is expected to be achieved in 2017-2019, corresponding EPS of 0.21/0.27/0.32 yuan/share. Maintain a buy rating. Risk warning: New production capacity was not released in a timely manner; the country's oil prices fluctuated, and the company's gross margin declined; the development of Jiaye Airlines fell short of expectations.