Results for the first half of 2017 exceeded expectations, Guanghui Baoxin announced the results for the first half of 2017: revenue of 15.67 billion yuan, up 44.1% year on year; net profit of 4030.3 billion yuan, up 521.3% year on year, corresponding to 0.14 yuan per share. The company's performance exceeded expectations after forecasting a growth rate of over 500%. The integration of development trends further enhances the scale effect, and refined management strictly controls costs. In the first half of 2017, Baoxin's efficiency improved dramatically. We believe it was mainly due to the smooth integration with Guanghui, which brought about scale effects and improved management efficiency through refined management through the ERP system. After-sales service has become the main growth point, and the growth trend of value-added services is strong. Baoxin's after-sales service revenue increased 31% year-on-year to 1.75 billion yuan, and gross margin increased 1.61 percentage points to 47.6%. With the help of Guanghui, Baoxin's commission revenue accounted for 18.1% of comprehensive gross profit, which is growing strongly. The auto finance business is growing rapidly; mergers and acquisitions are contributing increasing. By replicating Guanghui's financial management model and leverage platform, Baoxin's auto finance penetration rate reached 40% (an increase of 9 percentage points over the previous year). In the first half of 2017, Baoxin acquired 6 4S points and opened 1 new 4S point, while adding Alpha Romeo to the brand portfolio. Earnings Forecast We maintain our earnings per share forecast for the full year of 2017/2018 unchanged. Valuation and recommendations Currently, the company's stock price corresponds to 10.5 times the expected P/E for 2017. We maintain the recommended rating and target price of HK$5.50, with 40.31% upside compared to the current share price. Risk luxury car sales fell short of expectations.