Incident: The company recently released its semi-annual report. In the first half of the year, it achieved operating income of 196 million yuan, an increase of 16.2% over the previous year; net profit after deducting non-return to mother was 1.0887 million yuan, an increase of 84.9% over the previous year. Opinion: Optimizing the revenue structure and increasing the share of high-margin software. Software product revenue was 142 million yuan, up 27.1% year on year, accounting for 72.9% of overall revenue, up 6.2 percentage points year on year, gross margin was 95.86%, down 0.85 percentage points year on year. System integration revenue declined to 28.7839 million yuan, down 21.78% year on year, and gross margin was 19.14%, up 6.11 percentage points from last year. According to the business classification of last year's annual report, it can be estimated that the revenue of the technical service business was 24.4686 million yuan, an increase of 58.6% over the previous year, and the gross margin was 75.30%, down 4.68 percentage points from last year. Benefiting from the increase in the share of software products, the overall gross margin was 82.04%, an increase of 5.89 percentage points over the previous year. The fee rate is basically the same as last year. The sales expense ratio was 24.72%, down 1.46 percentage points from the same period last year; the management expense ratio was 39.83%, up 1.02 percentage points from last year; R&D expenditure was 353.12,400 yuan, up 22.0% year on year. Focus on the big data business segment. The company won the bid for the Ministry of Public Security's “Big Data Platform for Public Security Information Network Security Monitoring” project last year. It is expected that related big data platform construction projects will continue to be implemented in the field of public security. Continued attention is recommended. Profit forecast and investment rating: The company's EPS for 2018 to 2020 is estimated to be 0.08 yuan, 0.10 yuan, and 0.13 yuan, respectively, giving it a “recommended” rating. Risk warning: The amount of revenue accounts is large.