Investment highlights: The company released an interim report: In the first half of 2018, it achieved revenue of 307 million yuan, an increase of 56.81% year on year; realized net profit of 75.69 million yuan, up 51.08% year on year; net profit after deduction was 69.73 million yuan, up 39.92% year on year. The growth rate of revenue and net profit slightly exceeded expectations, mainly due to changes in the fund's valuation policy and version upgrades. In June, we expected the company's revenue and net profit growth rates for the first half of the year to be 43% and 44%, respectively. The company's actual performance slightly exceeded expectations. The company's endogenous revenue in the first half of the year was 284 million, +59.44% year-on-year, and endogenous net profit of 66.59 million (including investment income of participating companies - 2.81 million), a growth rate of 54.01%. The endogenous growth rate is higher than the growth rate in the consolidated report. Performance that slightly exceeded expectations was mainly due to the sharp year-on-year increase in customized software development and sales revenue of the parent company (+79.06%). On the one hand, demand for customer system transformation surged due to the intensive release of a series of fund valuation policies and new asset management regulations in the second half of 2017 (including business reform valuation accounting, liquidity risk management policies, and the Securities Regulatory Commission's guidance on securities investment fund valuation business). On the other hand, customer system changes brought about by the upgrade of the asset management system from 3.0 to 4.5 and the escrow system from 3.0 to 5.0 revenue. The number of new customers was relatively stable with the business demand of major customers, resulting in a low increase in service revenue. In the first half of the year, the company achieved service revenue of 71.99 million yuan, +22.42% year-on-year. The company's service revenue can be split into operation and maintenance service revenue, consulting and development service fee revenue, and outsourced service revenue. Operation and maintenance revenue mainly depends on the number of customers in the company's stock. The revenue from consulting and development service fees mainly depends on the new business needs of major customers, while outsourcing services mainly come from whether the business volume of major hosting system customers has increased. The number of customers in the company's stock is relatively stable. In particular, the escrow system targets large bank and brokerage customers. Since no new institutions have obtained escrow licenses, the number of major customers has hardly changed; on the other hand, there has been no significant increase in business demand from major customers, so service revenue has not increased significantly. R&D personnel costs will be controlled, and service and implementation costs will continue to rise. The company's operating costs in the first half of the year (salary for service implementers) were 56.92 million yuan, up 58% year on year; total R&D expenses (salary for R&D personnel) were 106 million yuan, up 31% year on year. The rapid rise in operating costs is mainly due to the increase in the number of on-site implementation and service personnel and the increase in employee remuneration. It is expected that the service implementation personnel recruited by the company last year will mainly be school recruitment, and fresh graduates will be hired in the second half of the year. Combined with the above reasons, the number of service and implementation personnel has increased dramatically compared to the same period last year. Since the company has set up R&D centers in Chengdu and Changsha, the per capita salary of R&D personnel is controlled to a certain extent, but since most financial institutions are in first-tier cities in the north, it is relatively difficult to keep the remuneration of service implementers stable, and it may rise to a certain extent along with the market average in the future. Maintaining profit forecasts and ratings: The company's PaaS container cloud innovation business is expected to be the main engine of performance growth, contributing 700 million in revenue over the next three years. EPS is expected to be 0.38/0.57/0.74 yuan in 2018-2020, respectively. The current stock price is 38/25/20 times PE, respectively, maintaining a “buy” rating. Risk warning: Traditional products and PaaS products belong to different teams, and the development process may be accompanied by equity changes and management integration.