Event: The company released its 2017 semi-annual report. In the first half of 2017, the company achieved operating income of 810 million yuan, a year-on-year increase of 31.25%; realized net profit attributable to shareholders of listed companies of 553.1332 million yuan, a year-on-year decrease of 27.86%; realized net profit of 563.34 million yuan after deducting non-recurring profits and losses, a year-on-year decrease of 22.74%; and realized basic earnings per share of 0.06 yuan/share, a year-on-year decrease of 33.33%. The company predicts a change in net profit of 7533.35 to 107.6193 million yuan from January to September, with a range of -30%-0%. Comment: The main business went hand in hand, and revenue increased by more than 30%. In the first half of the year, the company achieved revenue of 810 million yuan, a year-on-year increase of 31.25%, including outdoor resin revenue of 541 million yuan, a year-on-year increase of 30.42%, a gross profit margin of 15.59%, a year-on-year decrease of 8.52 percentage points; hybrid resin revenue of 172 million yuan, a year-on-year increase of 34.67%, and a gross profit margin of 15.40%, a year-on-year decrease of 8.88%. The revenue of high-end equipment manufacturing was 908.5558 million yuan, up 37.10% year on year, and gross profit margin was 50.12%, up 4.33 percentage points year on year. Due to the year-on-year increase in the price of raw materials for polyester resin products, and the rise in the price of the company's products lagged behind, the company's gross margin fell 7.05 percentage points to 19.45% year on year, causing the company's net profit to fall 27.86% year on year. New pentylene glycol and resin production expansion projects will be put into operation one after another, effectively reducing costs and increasing performance. The company currently has a polyester resin production capacity of 150,000 tons, far surpassing competitors and ranking first in market share. In January of this year, the subsidiary Shandong Lihuayi Excalibur (NPG) project with an annual output of 30,000 tons was successfully put into operation. The Ma'anshan Excalibur NPG project with an annual output of 40,000 tons is expected to be put into operation by the end of this year. Neopentylene glycol is one of the main raw materials for the company's polyester resin. Against the backdrop of a sharp rise in raw material prices, the commissioning of the project will effectively reduce the company's production costs. In addition, the subsidiary Huangshan Excalibur plans to complete installation in November this year and achieve trial production by the end of the year; the company announced that it plans to invest 20 million euros in Spain to build a 40,000-ton polyester resin project and a European R&D center. The release of production capacity will increase the company's performance in the future. Acquire 60% of Zhongxing Weiye's shares to expand and strengthen the high-end equipment manufacturing sector. In May, Jiaye Airlines, a wholly-owned subsidiary, acquired 60% of Zhongxing Weiye's shares with 127.8 million yuan. Zhongxing Weiye's business is led by the development of satellite positioning systems and modules, and is supported by navigation control systems. The Beidou satellite communication navigation terminals produced are mostly assembled in some of the Navy's weapons and equipment, and have four military licenses and second-level security qualifications. This acquisition is conducive to filling up the shortcomings of Jiaye Airlines in related business. It has achieved orderly and rapid expansion of its business, leveraging synergies, and expanding the “high-end equipment manufacturing” sector. Zhongxing Weiye merged in June and contributed 2,884,500 yuan in profit to the company during that month. The high-end equipment manufacturing sector continues to be enriched, and the two main industries are going hand in hand. On the basis of developing the polyester resin business with traditional advantages, the company has continued to enrich the high-end equipment manufacturing sector in recent years. Jiaye Airlines, which was acquired in 2015, specializes in high-end equipment manufacturing in the fields of aviation, aerospace and rail transit. It has a national military standard quality management system certification, a weapons equipment research and production license, and a three-level confidential qualification. It achieved net profit of 41.8832 million yuan in 2016, fulfilling a performance promise of 41 million yuan. Net profit of 209.55 million yuan was achieved in the first half of 2017. According to order conditions, it is expected to complete 17 years A performance commitment of 51 million yuan. At the same time, the main business scope of Shenjian Yuchang, a wholly-owned subsidiary, has increased the aviation, aerospace and rail transit business areas. Some machining processes in the Jiaye Aviation rail transit sector will be implemented at Yuchang within this year, which will help Xi'an Jiaye's existing business to expand and strengthen rapidly, while gradually entering other related industries in the high-end equipment manufacturing field to achieve the strategic goal of the company's dual main business development. Profit forecast and rating: We expect the company's operating revenue in 2017-2019 to reach 1,778 million yuan, 2,073 million yuan and 2,362 billion yuan respectively, up 25.85%, 16.55% and 13.95% year on year. Net profit from net profit will reach 162 million yuan, 206 million yuan and 308 million yuan respectively, up -4.02%, 27.21% and 49.20% year on year, and EPS will reach 0.19 yuan, 0.24 yuan and 0.36 yuan respectively, corresponding to the closing of business on August 30, 2017 The dynamic PE of the price (6.93 yuan/share) was 37 times, 29 times, and 19 times, respectively, maintaining the “increase in holdings” rating. Risk factors: Fluctuations in raw material prices, new production capacity falling short of expectations, and development of the high-end equipment manufacturing sector falling short of expectations.