The core view is that the semi-annual performance has maintained rapid growth: the company released the 18-year semi-annual performance forecast and achieved net profit of 29-330 million yuan, an increase of 35%-55% over the previous year. The median value in the range was 3.1 billion yuan, an increase of 45% over the previous year. Non-recurring profit and loss for the first half of the year was $11—120 million. If you consider $115 million, the median net profit for the range after deducting non-return net profit was $200 million, an increase of 57% over the previous year. Due to the company's US dollar bonds, Q2 was affected by exchange and caused losses of 45 million yuan in a single quarter. If the median value of the range of 3.1 million yuan was used as a reference for the first half of the year, and the Q2 exchange factors were excluded, then Q2 achieved net profit of 210 million yuan in a single quarter, an increase of 57% over the previous year and nearly 50% over the previous year. The high level of industry prosperity is one of the main drivers of high performance growth; in the first half of 2018, demand in downstream segments of the LED industry, such as small-pitch LED, urban landscape lighting, and automotive LED lighting, was strong, leading to a high increase in the company's demand for LED chips. At the same time, the company's new production capacity was gradually released and the production and sales rate continued to be high, and the company offset the impact of falling LED chip prices to a certain extent by reducing costs and improving light efficiency, driving the company's LED revenue to maintain high growth. Meixin Semiconductor is a high-quality sensor company that has merged with May: Meixin's acquisition has been completed. The company's products are mainly accelerometers and geomagnetic sensors, and the downstream includes consumer electronics and automobiles. The promised profit was: no less than 110 million yuan in 2018, no less than 250 million yuan in 18-19, and no less than 420 million yuan in 18-20 years. Meixin began merging in May '18, contributing to the company's performance. Financial forecasts and investment recommendations We forecast the EPS for 18/19/20 to be 0.77/1.08/1.39 yuan (Meixin was consolidated in May; the original forecast for EPS for 18/19/20 was 0.81/1.15/1.50 yuan; considering that the Meixin merger time and Q2 chip price decline slightly exceeded expectations, the original forecast for the US-New Zealand merger time was mid-April 18), according to comparable companies, the corresponding target price was 21.56 yuan, maintaining the buying rating. Risks suggest that the LED chip industry is fiercely competitive; there is some uncertainty about the growth of the sapphire business; the progress of investment in new businesses may not meet expectations; and the performance of the US and New Zealand may not meet expectations.