Investment advice: Standing at the current time point, looking at the entire financial IT software provider industry, considering the rigidity and growth of the company's industry needs, the company's leading segmentation position, and the huge potential space brought by the Fintech layout, given the rapid growth in the company's 2018 mid-year report in line with expectations, we continue to be optimistic about the rapid growth of the company's future performance and maintain a “highly recommended” rating. Revenue and profit continued to grow rapidly, in line with expectations: in the first half of 2018, the company stepped up its market development efforts and actively expanded new fields and customers, and the scale of sales contracts for financial institution customers rose steadily. In the first half of 2018, the company achieved operating income of 307 million yuan, an increase of 56.8% over the previous year, net profit of 75.69 million yuan, an increase of 51.1% over the previous year, and realized net profit of 69.73 million yuan after deduction, an increase of 39.9% over the previous year. The 51.1% year-on-year increase in net profit of the company was slightly above the center of the growth range of 40-60% in the company's 2018 semi-annual report, which is in line with expectations. The Social Security Fund recorded a record increase in holdings in the second quarter, and many institutions laid out historic opportunities for future development: According to the 2018 semi-annual report data, the National Social Security Fund 502 Group bought about 12.58 million new shares, accounting for about 2.94% of tradable shares, ranking as the fourth largest shareholder in tradable shares. This number of shares also refreshed the highest value of shares held by social security funds in the company since the company was listed. In addition, WIND data also shows that the number of public funds currently holding more than 4 million shares of the company's tradable shares has reached 5, and the shareholding concentration has also surpassed the highest level in history. From one side, it also shows that institutional investors such as social security and public offering have a high level of recognition and optimism about the historic development opportunities faced by the company in promulgating and implementing the “New Asset Management Regulations.” “Seize the moment, aim for a thousand miles”. Net operating cash flow has improved markedly, and supply chain financial risk control effects are obvious: the company's net operating cash flow in the first half of 2018 was -133 million yuan, an improvement of 91.17 million yuan over the previous year. Among them, Shanghai's profit operating cash flow increased by about 84.43 million yuan over the same period last year, and the supply chain financial risk control effect was obvious. Currently, the customer groups of the company's supply chain business and factoring business are mainly A-share listed companies and their core suppliers, enterprises listed on the New Third Board, and leading national agricultural enterprises. Moreover, each enterprise has provided corresponding collateral, pledge and guarantee measures, and credit risk is manageable. The tax reduction policy favors the company's future development and raises the company's profit expectations for 2018-2020: On July 23, 2018, Premier **** of the State Council held an executive meeting of the State Council to “expand the policy of increasing the additional deduction ratio for enterprise R&D expenses to 75% from technology-based SMEs to all enterprises.” Tax reduction policies will encourage companies to actively invest in R&D, further improve product lines, and enhance market competitiveness. Since the company does not meet the standards for technology-based small and medium-sized enterprises (for example, the number of employees in the company exceeds 500), it is the beneficiary of this tax reduction policy. In the future, the company's R&D expenses plus deduction ratio will increase from 50% to 75%. Given that the company has adopted prudent accounting for all R&D expenses over the years, we predict that the company's R&D expenses in 2018-2020 will be about 295 million yuan, 427 million yuan, and 582 million yuan. Assuming that the company's comprehensive income tax rate in 2017 is about 9%, the company will add net profit of 6.64 million yuan, 9.61 million yuan, and 13.1 million yuan to 275 million yuan, 383 million yuan and 531 million yuan in 2018-2020. Risk warning: policy progress falls short of expectations; competition intensifies, business development falls short of expectations; and credit risk for supply chain finance customers is increasing.