Performance summary: In the first half of 2017, the company achieved operating income of 84.67 million yuan, a year-on-year decrease of 2.91%; net profit attributable to shareholders was 16.56 million yuan, a year-on-year decrease of 9.35%. The company signed contracts mainly for delivery in the second half of the year, and revenue declined slightly in the first half of the year. During the reporting period, the company's revenue scale was small and declined slightly. The company's aviation inertial navigation product revenue declined year-on-year, mainly due to the concentration of contract delivery and acceptance signed in 2017 in the second half of the year; aero-engine electronics products achieved high growth, mainly due to increased sales of the company's production engine parameter collectors and newly developed flight control computers. Looking at the whole year, with the company's habitual guidance and engine electronics products entering a centralized delivery period in the second half of the year, annual revenue growth is expected to be relatively rapid. Asset impairment preparations are increasing, and the net profit growth rate is slightly lower than the revenue growth rate. During the reporting period, the net profit growth rate was less than the revenue growth rate, mainly because the company's accounts receivable for one year or more were relatively high, and the company's preparations to accrue bad debts increased in the current period. Asset impairment preparations for the first half of 2017 were 7.518 million yuan, compared to 3.619 million yuan in the same period last year. However, in reality, the risk of bad debts on military accounts receivable was very small, and they were all returned. Looking at the whole year, with the delivery of products such as laser inertial guidance and flight control computers with high gross margins in the second half of the year, the company's net profit is expected to grow relatively rapidly. Deeply involved in the field of military aviation inertial guidance, our military helicopter inertial guidance core supplier. The company is the main supplier of inertial guidance for military helicopters in China. Its leading technical strength and more than ten years of experience in supporting inertial guidance for military aircraft are the moat for the company's development. With the expansion of the Army Air Force and the vigorous development of the Navy and Air Force, the gap in domestic helicopter demand has further widened, and there is a large demand for replacement of backward models. With the finalization of new domestic main fighter models in recent years, it is expected that military helicopters will be installed at an accelerated pace during the 13th Five-Year Plan period, and the company will benefit fully. Profit forecast and rating: Net profit growth in 2017-2019 is expected to be 43.21%, 14.96% and 19.48% respectively, and EPS is 0.83, 0.95 and 1.14 yuan respectively, giving a “buy” rating. Risk Warning: Civil-military integration falls short of expectations, military helicopter installation falls short of expectations