Key investment events: The company released its semi-annual report. In the first half of 2017, it achieved operating income of 88.994 million yuan, an increase of 36.9% over the previous year, and achieved net profit of 19.221 million yuan, an increase of 40.7% over the previous year. The industry is booming, and the company's performance is growing rapidly. In 2017, the company's downstream core photovoltaic industry was booming, and with the continuous maturity of black silicon superimposed diamond wire technology, the penetration rate of electroplated diamond wire in the field of polysilicon chips continued to increase, bringing huge demand elasticity. The supply of electroplated diamond wire was in short supply, and the industry maintained a high level of prosperity. The company continued to expand production capacity in the first half of the year, and business performance achieved rapid growth. The company's net cash flow from operating activities in the first half of 2017 was RMB 34.876 million, about 1.8 times the net profit for the same period. The fund-raising project is expected to be completed ahead of schedule in the third quarter. With the company's IPO funding in place, in the face of excellent market opportunities, the company rapidly expanded production capacity in the first half of the year and accelerated the implementation of fund-raising projects. It is estimated that all equipment investment and production capacity release for the 1,000,000-kilometer diamond wire saw fund-raising project will be completed ahead of schedule in the third quarter of 2017. On this basis, the company will further expand production capacity according to market demand, so as to better grasp market opportunities and achieve rapid growth in the company's performance. R&D investment continues to grow, and new product development is progressing steadily. The electroplated diamond wire industry is in a period of rapid technological iteration. Higher production efficiency and product quality are a strong guarantee for an advantageous position in the future competitive landscape. The company continued to increase product research and development in the first half of 2017 and actively laid out product development plans for the next few years. In the first half of 2017, the company invested 5.3322 million yuan in R&D expenses, an increase of 34.26% over the previous year. As of June 30, 2017, 40 authorized patents have been obtained (including 8 invention patents), and 7 new patents have been applied for (including 6 invention patents). The decline in production capacity has led to a decline in gross margin. The company's consolidated gross margin for the first half of the year was 45.4%, down 3.5% from 2016. We believe that in the first half of the year, the price of King Kong wire was at a stable level in the context of industry prosperity. The decline in gross margin was mainly caused by the company's diamond wire business in a period of climbing capacity, rapid iteration of related technology and processes, and continuous upgrading of the new process. The gross margin will be repaired later as the new process continues to mature. Profit forecasting and investment advice. Since the company's fund-raising project is expected to be completed ahead of schedule in the third quarter, capacity release is ahead of schedule, and the company's performance is expected to grow rapidly, we have raised our profit forecast. The company's EPS in 2017-2019 is expected to be 1.31 yuan, 2.45 yuan, and 2.97 yuan respectively. The corresponding PE ratio is 43 times, 23 times, and 19 times, and the compound net profit growth rate for the next three years is 59.7%, giving the company a 29-fold valuation in 2018 (corresponding to PEG of about 0.49) and a corresponding target price of 71.05 yuan, maintaining a “buy” rating. Risk warning: risk of large fluctuations in upstream raw material prices; risk that industry sentiment may not continue to increase; risk of a sharp drop in diamond wire prices.