Revenue increased by 21.74% Net profit increased by 366.71%. 2017H1 Huasheng Tiancheng achieved revenue of 2,547 billion yuan, an increase of 21.74% over the previous year, mainly due to the growth of enterprise IT systems business and significant growth in cloud computing products and services; net profit to the mother was 153 million yuan, an increase of 366.71%, mainly due to a sharp increase in main business profit and investment income and a decrease in asset impairment losses; after deducting non-net profit of 440.22 million yuan, an increase of 51.71%. Mergers and acquisitions and self-research drove a 172.10% increase in cloud computing revenue, accounting for 8.8% of total revenue. Huasheng Tiancheng's IT system solutions business deepened online cooperation with Huawei, achieving revenue of 2,306 billion yuan, an increase of 15.47% over the previous year; the cloud product and service sector's revenue was 223 million yuan, an increase of 172.10%. One was due to mergers and acquisitions of GD companies, and second, R&D to form a complete autonomous and controllable high-end product system. The company's autonomous Power Server achieved a year-on-year increase of about 80% in the amount of new contracts signed, which was well received by more than 200 important customers in finance, finance, taxation, politics and law, meteorology, customs, energy, and enterprises. Investment income of 183 million yuan increased sharply by 1426.95%. 2017H1's sales expenses increased 4.26% year on year; management expenses increased by 45.07%, mainly due to the increase in labor costs and intermediary expenses due to the acquisition of GD; financial expenses increased by 21.80%, mainly due to the increase in current loans. During the reporting period, the company achieved investment income of 183 million yuan, an increase of 1426.95% over the previous year. The main reason was the partial disposal of Rand Network and the profit and loss of Guoyan Tiancheng, a joint venture enjoyed under the Equity Law. IT system+independent products+Internet of Things, the “troika” drives performance growth. On the basis of the steady development of IT systems, the market competitiveness of the company's own products and solutions, especially autonomous power servers, was further strengthened. At the same time, the company explored a new “Internet of Things+Big Data” business model by investing in IoT chip manufacturer Tailing Microelectronics. The “troika” is driving rapid growth in performance, and the prospects are promising. Profit forecast and investment recommendations We expect revenue of $52.35/59.37/6.867 billion yuan respectively from 2017 to 2019, up 9.1%/13.4%/15.7% year-on-year respectively. Net profit for 2017-2019 was 2.05/2.12/308 million yuan respectively, up 472.4%/3.5%/45.4% year-on-year respectively. Earnings per share from 2017 to 2019 were 0.19/0.19/0.28 yuan, corresponding price-earnings ratios of 50.9/49.1/33.8 times, respectively. Maintain an increase in holdings rating. Investment risk The development of cloud computing fell short of expectations.