Matters: The company released its semi-annual report on August 14: The first half of 2018 achieved revenue of 307 million yuan, an increase of 56.81% year on year; realized net profit of 756.902 million yuan, an increase of 51.08% year on year; net profit after deducting non-net profit of 69.732 million yuan, an increase of 39.92% year on year. Comment: Performance has grown rapidly, and the revenue structure has further improved. The company achieved revenue of 307 million yuan in the first half of the year, an increase of 56.81% year on year; realized net profit to mother was 756.902 million yuan, an increase of 51.08% year on year. Among them, the second quarter achieved revenue of 163 million yuan, up 38.27% year on year, maintaining a rapid growth trend; net profit to mother and net profit after deducting non-net profit in the second quarter were 50,2505 million yuan and 443.36 million yuan respectively, up 42.72% and 26.86% year on year, respectively. The high performance growth in the first half of the year was mainly driven by financial informatization in the main business. Financial expenses were -5.6394 million yuan, the same period last year was -11.8825 million yuan, net investment income was -1.3758 million yuan, and 6.865 million yuan for the same period last year. After deducting the influence of these factors, the performance growth rate brought about by financial informatization is even more impressive. Software products are growing rapidly and continue to benefit from the advancement of large-scale asset management informatization. Software development and sales achieved revenue of 209 million yuan, an increase of 79.06% over the previous year, confirming that IT system upgrades in the large asset management industry are still progressing rapidly. The gross margin increased by 5.23 percentage points to 88.76%. The increase in product standardization is expected to be an important factor; software technology service revenue achieved revenue of 71.9864 million yuan, an increase of 22.42% over the previous year; the share of high-margin software development and sales business increased significantly, and the business structure was further optimized. Currently, asset management informatization itself lags behind the rapid development of the asset management industry, and with the implementation of policies such as new asset management regulations, and further regulations such as net value management and fair value measurement of asset management products become new requirements, demand for large-scale IT upgrades will be released at an accelerated pace. The company's valuation accounting series products provide financial institutions' asset management business with full information disclosure based on net worth and fair value measurement tools based on valuation technology, and are expected to fully benefit from both business and regulatory drivers. Actively lay out technological innovation and vigorously expand the product field. In terms of innovative technology, we actively deploy fields such as big data, cloud computing, artificial intelligence, blockchain, and microservices to continuously enhance the competitiveness of existing technologies. In terms of products, it is further extended to OTC transactions, non-standard assets, TA fund settlement, intelligent asset management operation, intelligent escrow services, etc., and is widely used in financial industry research, analysis, investment, trading, risk control, supervision, settlement, accounting and valuation, performance evaluation, depository and escrow, data integration, customer service, etc., and the comprehensive strength of IT for large asset management continues to improve. In the first half of the year, it participated in Beijing Huiwen Technology, which has NLP technology, platform R&D capabilities, and hardware R&D and manufacturing capabilities with completely independent intellectual property rights; participated in the establishment of Huaiguang Intelligence and actively deployed in the field of image recognition technology. Foreign investment in the AI field is expected to provide better technical support for the company to achieve intelligent operation services, and is expected to form more collaboration with the company's business in the future. Investment advice: The company is a domestic asset IT leader, with significant performance benefiting from the continued rapid growth in demand for informatization in the asset management industry. Continued standardization of regulatory policies such as new asset management regulations has also brought business growth to the company. Considering that the new round of upgrades and IT system transformation under the new asset management regulations are still at an early stage, we expect the company's business to maintain rapid growth in the next few years; steady progress in the fintech sector is expected to bring greater performance flexibility. We expect the company's net profit for 2018-2020 to be 280 million yuan, 390 million yuan, and 508 million yuan respectively. The corresponding PE is 39 times, 28 times, and 22 times, respectively, giving it a “recommended” rating. Risk warning: The speed of customer upgrades and replacements falls short of expectations, and the promotion of new business falls short of expectations