Matters: The company released its semi-annual report on August 29: the first half of 2018 achieved revenue of 145 million yuan, an increase of 34.36% year on year; realized net profit of 14.1784 million yuan, an increase of 13.36% year on year; net profit after deducting non-net profit of 12,104 million yuan, an increase of 12.10% year on year. Comment: Revenue is growing rapidly, and net interest rates are temporarily low. The company achieved revenue of 145 million yuan in the first half of the year, an increase of 34.36% over the previous year; realized net profit of 14.1784 million yuan, an increase of 13.36% over the previous year. Among them, revenue of 96.3739 million yuan was achieved in the second quarter, up 38.41% year on year. The growth rate increased significantly compared to the first quarter, confirming that early orders began to be reflected. Net profit to mother was 11.1651 million yuan in the second quarter, down 2.19% year on year, and realized deducted non-net profit of 1.0357 million yuan, a year-on-year decrease of 2.08%. The net interest rate for the first half of the year was 8.77%, which is temporarily low. We expect it to be mainly affected by business seasonality. Scenario-based applications are gaining momentum, and product functions are constantly being optimized. The scenario-based application system achieved revenue of 52.0596 million yuan, an increase of 78.88% over the previous year, and the medical information system achieved revenue of 71.729 million yuan, an increase of 7.83% over the previous year. The growth rate was temporarily low. In terms of products, the company sorts out and improves the core system products involved in general hospital informatization solutions, and sorts out the original business systems such as hospital information systems and electronic medical records from the underlying architecture. After completion, it will further improve the quality of the company's core products and services and shorten the delivery period. At the same time, for next-generation hospital informatization solutions for large general hospitals, the company has further improved module functions such as day wards, emergency care systems, and clinical pathways. Its next-generation hospital management information system uses new technologies such as B/S, cloud computing, SOA, REST API, and Html5 to break the original HIS, EMRS, and HRP system lines, and implement a set of core business logic service interfaces at the bottom, which conforms to the trend of medical IT unification and helps further improve competitiveness. Major orders continue to break through, and business models are further enriched. It has shown outstanding performance in the expansion of large-scale smart medical projects. It has won the bid for the Chinese People's Liberation Army Air Force Military Medical University Xijing Hospital, the Second Affiliated Hospital of Shaanxi University of Traditional Chinese Medicine, Kunming Social Welfare Institute, Chongqing People's Hospital, Guangxi International Zhuang Medical Hospital, Xi'an People's Hospital, and Anshun Maternal and Child Health Hospital. In particular, Xijing Hospital is one of the top five large-scale modern hospitals in the country. It is also a benchmark hospital in the northwest region. In the construction of smart cloud healthcare, we are gradually transforming to a “service operation” model based on the previous “product+solution+project” business model, from traditional information system suppliers to information service operators that provide long-term operation services based on data applications. Standardize, commercialize and network service solutions, continue to provide customers with a high level of service, and further enrich the business model. Investment advice: Considering that 2017 results were lower than our previous expectations, we lowered the company's net profit forecast for 2018-2019 to 0.49/171 million yuan (the forecast value before the reduction was 0.85/103 million yuan). We expect the company's net profit for 2020 to be 99 million yuan, corresponding to PE of 58/40/29 times, respectively. Based on the company's high-grade electronic medical records having strong market competitiveness, and at the same time continuing to improve in terms of large orders, and the momentum of scenario-based applications is good, we are still optimistic about its growth space and maintain a “recommended” rating. Risk warning: New business investment puts pressure on performance