Event: The company released its 2017 semi-annual report. During the reporting period, it achieved operating income of 688 million yuan, an increase of 12.66% over the previous year, and realized net profit attributable to shareholders of listed companies of 34.1892 million yuan, an increase of 32.00% over the previous year. Non-net profit attributable to shareholders of listed companies was reduced by RMB 30.2963 million, an increase of 42.38% over the previous year. Product systematization has outstanding advantages and continues to lay out new fields. The company continues to increase its product serialization process, gradually shifting from a single device supplier to a solution provider. At present, the company has established a domestic competitive power semiconductor device product line, including high-end diodes, single and bidirectional silicon controlled silicon, high voltage MOS series, low voltage Trench MOS series, and trench-FS IGBT. Under the premise of maintaining a competitive advantage in the traditional consumer electronics sector, the company has further expanded market growth points for new energy vehicles, inverter home appliances, military industry, etc., and has achieved certain results, and is expected to open up new fields of growth. With the new energy vehicle Dongfeng, IGBT opens up room for growth. At present, the company's sixth-generation IGBT products have been successfully developed and received good application feedback in the fields of new energy vehicles, charging piles, and inverter home appliances. According to the State Council's “13th Five-Year Plan for the Development of Strategic Emerging Industries”, by 2020, China will produce and sell more than 2 million new energy vehicles in that year, and the NEV industry chain will continue to grow rapidly. IGBTs are the core components of new energy vehicles and their IPM (intelligent power modules), and there is an urgent need for domestic replacement. We believe that the company has leading technology in the field of new energy vehicle IGBTs, outstanding manufacturing processes, and scarce “actual mass production implementation” capabilities, and is expected to achieve a breakthrough in domestic production in the field of high-end power semiconductors. The company's management continues to be optimized, and competitiveness is constantly improving. The company further promotes the use and management of business divisions to improve the company's overall operating performance. During the reporting period, the company continued to adjust its organizational structure, integrate and optimize organizational functions, and thoroughly implement business unit operations. Through the integration of production, technology and sales, the division quickly responded to market product demand, application demand and technical demand, steadily increased product market share, and continued to rise in sales; at the same time, through project management, all divisions were driven to upgrade their products, process technology, and equipment optimization, and continuously improve organizational competitiveness. Investment advice: Buy-A investment rating. We expect the company's net profit from 2017 to 2019 to be 110 million yuan, 169 million yuan, and 229 million yuan respectively. The net profit growth rates are 171.9%, 52.9%, and 35.3% respectively, corresponding to EPS of 0.15, 0.23, and 0.31 yuan/share, respectively. Considering the trend of industry resource integration, the company has strong endogenous and epitaxial development expectations; the military/new energy industry needs an urgent breakthrough, and high value-added products continue to optimize profitability. Given the high future performance growth and potential breakthroughs in the industry's valuation center, the target price for 6 months is 10.52 yuan for 2017 Dynamic PE 70X.