2017 semi-annual report: Achieved operating income of 84.67 million yuan, a year-on-year decrease of 2.91%, and net profit attributable to the parent company of 16.564 million yuan, a year-on-year decrease of 9.35%. Due to the fact that the delivery and acceptance of product order contracts signed by the company in 2017 was concentrated in the second half of the year, operating income decreased compared to the same period last year. Deliveries were concentrated in the second half of the year, leading to a sharp decline in aviation inertial guidance revenue. Since delivery of aviation inertial guidance product orders was mainly concentrated in the second half of the year, the inertial guidance sector only achieved revenue of 51.4312 million yuan in the first half of the year, a year-on-year decrease of 29.1%, and a gross profit margin of 41.68%, a year-on-year decrease of 12.81%. The revenue of the three major inertial systems, flexible, optical fiber, and laser, declined by 69.4%, 70.9%, and 36.44%, respectively, during the same period. Only navigation computer components in the sector achieved growth over the same period last year, achieving revenue of 24.01 million yuan, an increase of 33.18%. The doubling of aero engine electronics products is expected to benefit from engine emissions. During the reporting period, aero engine electronics products achieved revenue of 19.06 million yuan, an increase of 120.67% over the previous year, achieving a significant overall increase. The aero engine electronics sector doubled its growth mainly because the company received more contract orders in 2017, and delivered to customers as scheduled and passed the inspection according to the order delivery schedule. Professional technical services have exploded, accounting for relatively little difficulty in improving the overall decline. During the reporting period, professional technical services achieved revenue of 12.5 million yuan, a year-on-year increase of 215.67%, gross profit margin of 86.32%, and a year-on-year increase of 16.13%, achieving explosive growth, but the share of revenue was relatively small. We forecast the company's 2017-2019 EPS0.65/0.8/1.07, corresponding to a valuation of 54/44/33 times, for the first time covered, and gave the company an “added” rating. Risk warning: The aviation industry is developing faster than expected; military procurement fluctuates.