Key points of the announcement The company announced the 2018 semi-annual report. In the first half of the year, the company achieved operating income of 668 million yuan, an increase of 56.48% over the previous year, and a net profit of 26.6828 million yuan, an increase of 156.43% over the previous year. Profitability continued to recover, in line with expectations. More investment points blossomed, and growth momentum was verified. During the reporting period, the company continued to gain strength in overseas markets and nuclear power markets, maintaining a rapid growth trend. Among them, the overseas market achieved revenue of 103 million yuan in half a year, an increase of 24.75% over the previous year, accounting for 86% of overseas market sales in 2017; the nuclear power sector continued to supply Yangjiang and Hongyan River projects, revenue increased 162.07% year over year; and traditional advantageous projects such as steel and coal mines all achieved exponential growth. Furthermore, the rail transit business has become the company's new growth pole, achieving revenue of 78.4418 million yuan in the first half of the year, accounting for 11.74% of receivables. We believe that with the continuous improvement of the company's management, more business will blossom, which will provide continuous impetus for the company's business growth. The incentive mechanism is gradually being put in place, demonstrating management's confidence that the company recently used 60 million yuan to repurchase 10.1946 million shares, accounting for 1.96% of the company's total share capital, and plans to grant 142 company executives at a price of 2.95 yuan/share for equity incentives. The initial grant portion was lifted in three installments 12 months from the date the grant registration was completed. The unlocking conditions were that the 2018-2020 net profit was not less than 500 million yuan, 100 million yuan, and 200 million yuan, up 294.12%, 588.24%, and 1176.47% respectively from the 2017 net profit of 17 million yuan, and the CAGR was 127.44%. We believe that these exercise conditions demonstrate the company's strong confidence in future development, and that equity incentives are conducive to fully mobilizing the enthusiasm of the company's middle and senior executives and helping the company achieve high growth in performance. Investment recommendations We expect net profit from 2018 to 2020 to be 0.55, 1.11 and 203 million yuan, respectively, with year-on-year increases of 223.08%, 103.27% and 82.71%, respectively. EPS corresponding to the current share capital is 0.1, 0.21, and 0.39 yuan/share. Maintain the company's “increased holdings” rating based on comprehensive considerations. Risk warning: New business expansion or unmet expectations, and competition in cable products may further intensify.