1. Event Overview Recently, the company released its 2017 semi-annual report: The company achieved operating income of 192 million yuan, an increase of 14.96% over the same period last year, and net profit attributable to shareholders of listed companies of 25.35 million yuan, an increase of 12.97% over the previous year. The corresponding EPS was 0.36 yuan, a decrease of 16.28% over the previous year. 2. Analysis and judgment that the performance was in line with expectations. The steady development of the Networked Network Optimization business promoted steady performance growth. During the reporting period, the company achieved operating income of 192 million yuan, an increase of 14.96% over the same period last year. The main reason was: the company used its advantages in brand, capital, etc. after listing to step up efforts to expand new market regions, and strengthen project control, improve management efficiency, and cope with the risk of declining industry gross margin. During the reporting period, the company continued to provide high-quality network operation and maintenance and network optimization services to the three major telecom operators and communication equipment suppliers such as Huawei and ZTE. The company's market share in advantageous markets such as Fujian and Guizhou has gradually increased, thus further consolidating its market position. In addition, the company has entered the Guangdong radio and television network market and cooperated with Emerson Network Energy Co., Ltd. to provide a good foundation for the company to expand and explore new markets and new cooperation models. In the first half of 2017, the company won a total of 440 million yuan in the communications public network market, which strongly guarantees the company's business scale over the next 3 years and provides sufficient cash flow support for the company to expand new business in the communications industry. It has continuously won bids for self-networking equipment procurement projects, and has achieved new breakthroughs in the new self-networking business. The self-networking equipment developed by the company has made important breakthroughs in market expansion. It has successively won bids for the China Mobile Emergency Communications Procurement Project (10.53 million yuan) and the Fujian Armed Police Corps Conference Communications Security Project (2.93 million yuan), taking a strategic step for the company's subsequent expansion in the self-networking market. During the reporting period, the company continued to step up technology research and development, resource integration, and market expansion for self-networking projects, actively expanding various application fields of self-networking, and accelerating the implementation of the company's self-networking market strategy. The company will actively expand the various application fields of ad hoc networking, continuously increase the revenue share of wireless ad hoc networking in the company's business, and accelerate the implementation of the company's ad hoc networking market strategy. The company will continue to increase resource investment in self-networking services based on existing communication network technology services, and extend business expansion to ICT, Internet of Things and other related fields through the two paths of endogenous growth and external mergers and acquisitions. The capital raised to achieve the strategic layout of the national market, establish R&D centers to enhance the company's technological innovation advantages, and the net capital raised by this offering is estimated to be 147 million yuan, mainly invested in communication network technology service platform construction projects and R&D center construction projects. (1) The communication network technology service platform construction project will achieve the company's strategic goals in the national market: it is proposed to invest 133 million yuan, including the construction of a headquarters base and a marketing service network. The headquarters base construction also includes the construction of a service network management center, training and exhibition center, and technical support center; the marketing service network includes expanded or newly built marketing service outlets in Fujian, Shandong, Guangdong, etc. (2) The R&D center construction project will further enhance the company's technological research and development capabilities and enhance the company's technological innovation advantages: it is proposed to invest 40,5978 million yuan. The implementation of the project aims to establish a complete product, technology research and development system, further enhance the enterprise's ability to innovate independently, and promote the sustainable development of the company. 3. Profit forecasts and investment recommendations expect the 2017-2019 EPS to be 0.65, 0.83, and 1.04 yuan respectively, and the corresponding PE is 90.00 times, 70.48 times, and 56.25 times, respectively. Since the company is a new stock, the valuation level is high. The company has expanded from regional regions to the whole country and overseas. Given the company's expectations of extended mergers and acquisitions, a certain valuation premium was given, giving the company 110-115 times PE in 2017. The reasonable price range for the next 12 months is 71.5-74.8 yuan. Maintain a “Highly Recommended” rating. 4. Risk warning: Communication network management services are fiercely competitive; domestic and overseas market expansion is blocked; and investment in raising capital has not progressed as expected.