Key investment revenue increased dramatically, and net profit was affected by fluctuations in raw materials: 2018H1 achieved operating income of 1,185 million yuan, a year-on-year increase of 58.64%; net profit attributable to shareholders of listed companies was 0.37 million yuan, a year-on-year decrease of 38.98%, mainly due to large fluctuations in raw material prices, a decrease in product gross margin compared to the same period last year, and a decrease in current investment income. Cathode material production capacity gradually expanded, and sales volume increased dramatically: during the reporting period, the company's cathode materials business achieved sales revenue of 847 million yuan, an increase of 93.58% over the previous year, and a gross margin of 7.71%. It is estimated that with the gradual release of production capacity of the Anglo-German Phase II project in the second half of the year, the company's annual cathode material revenue is expected to reach 1.9 billion yuan. The lithium battery equipment business is stable and the back-end products are actively deployed: during the reporting period, the company achieved lithium battery equipment business revenue of 251 million yuan, a year-on-year decrease of 4.83%, and a gross margin of 30.13%. The company won the bid for the CATL 360 million yuan high-speed double-layer coating machine project, and the technology was recognized by first-class battery manufacturers. At the same time, the company plans to acquire Yuchen Automation, actively lay out back-end lithium battery equipment, and form a “material+equipment” dual-leading business pattern. The company's business situation is stable, and various financial indicators are stable: the cathode materials business is affected by large fluctuations in raw material prices, and gross margin has been lowered. The lithium battery equipment market is relatively stable, gross margin is the same as last year, and various financial indicators are stable. Investment advice: The company's EPS for 18-20 is expected to be 0.68, 0.77, and 0.90 yuan, respectively. Corresponding to the closing price of August 29, 2018 PE will be 21, 19, and 16 times, respectively, maintaining a prudent increase rating. Risk warning: Risk of NEV production and sales falling short of expectations, risk of NEV policies falling short of expectations, relatively large share of goodwill assets, and large amounts of accounts receivable and bad debts