The performance slightly exceeded the upper limit of the guidelines. The company achieved operating income of 2,408 billion yuan in the first half of 2018, an increase of 278.34%; net profit of 180 million yuan, an increase of 258.4% over the previous year; and net profit of 156 million yuan, an increase of 230.19% over the previous year. The net profit growth rate slightly exceeded the upper limit of the interim report performance guideline range predicted by the company in the first quarter report. The various business lines are developing well. By business line, the company's Beidou high-precision business and integrated communication business (military autonomous network) all performed well, achieving revenue of 440 million yuan and 1.62 billion yuan respectively; growth rates were 62.18% and 100%. Furthermore, the Beidou mobile internet business was affected by the imbalance in the determination of orders for the public safety business and civil aviation business throughout the year, achieving revenue of 172 million, a year-on-year decrease of 9.36%; and the space-time information service business achieved revenue of 134 million yuan, a year-on-year decrease of 0.45%. Beidou's high-precision business has made breakthrough progress. 1) Surveying and mapping: Through the expansion of multiple brands and channels at home and abroad, product market competitiveness has been strengthened, and the measurement, surveying and mapping business has achieved significant performance growth, with a year-on-year increase of 61.67%; 2) Precision agriculture: The company has carried out product strategic cooperation with many well-known domestic and foreign front-loading tractor manufacturers, and has successively carried out product development cooperation with domestic manufacturers such as “Yitou”, “Dongfeng”, “Wuzheng”, “Zhonglian Heavy Industry” and many well-known overseas tractor manufacturers. Business increased by 43.56% year on year; 3) Digital construction machinery control: Good business progress was achieved in the first half of 2018. The precision agriculture and machinery control business is currently in the business introduction period. The products have the advantage of replacing foreign products, and there is great potential in domestic and foreign markets in the future; 4) High-precision core chips and boards: The company's high-precision core chips and board technology have been continuously optimized and widely applied in the fields of measurement, surveying and mapping, precision agriculture, mechanical control, robotics, drones, driving tests, etc., and the revenue of high-precision boards and antennas increased 229.43% in half a year. There are plenty of orders in hand. The company signed a total of 2,501 billion orders for the military autonomous network business in the first half of the year. In addition, in 2017, the company received more than 2 billion orders for self-organized networking products, and the total confirmed revenue in the 2017 financial report was 568 million. Considering that the order delivery cycle is 255 or 260 calendar days after the contract comes into effect, most orders will be confirmed one after another in 2018. Generous orders will lay the foundation for high growth in the company's performance. Investment advice: The company continued its high growth trend in 2018, and its business lines blossomed more. We believe that a large reserve of orders will ensure the sustainability of the company's high growth. The EPS for 2018 and 2019 is expected to be 0.66 yuan and 0.89 yuan, maintaining the “buy-A” investment rating, and the target price for 6 months is 22 yuan. Risk warning: The development of the Beidou industry falls short of expectations; the bad debt rate has increased.