Event: In the first half of 2018, the company achieved total revenue of 877 million yuan, a year-on-year increase of 78.19%, net profit of 24.86 million yuan, a year-on-year increase of 233.46%; basic earnings per share of 0.05 yuan, an increase of 400% year-on-year. Key investment points The core competitiveness advantage of the defense sector continues, and the current order tasks are full. Overall, the company maintained continuous rapid growth during the reporting period. Looking at a single quarter, operating income increased 24.25% year on year in the second quarter, and net profit increased 234.03% year on year, 4.37 percentage points higher than the year-on-year growth rate in the first quarter, maintaining a rapid growth trend in net profit. In particular, judging from the company's main business, the defense sector, during the reporting period in the first half of 2018, the main business revenue of defense products was 579 million yuan, an increase of nearly 332 million yuan over the previous year, an increase of 134.41% over the previous year. The increase in performance was mainly due to confirmed price differences in final assembly products. At the same time, changes in the structure and sales volume of defense products led to a year-on-year increase in sales of products with high gross margins. During the reporting period, in the defense sector, the company maintained good development in the three fields of large-scale weapon system assembly integration, precise guidance, and optoelectronic information equipment. It has achieved many development tasks, full existing orders, and maintained high-quality core competitiveness. The company will continue to maintain its growth trend in the second half of the year to ensure the full completion of its annual goals. The optoelectronic materials and devices sector has strong technical advantages and obvious market advantages. During the reporting period for the first half of 2018, optical materials and device products achieved main business revenue of 346 million yuan (including offsets), an increase of 83 million yuan over the previous year and an increase of 31.56% over the previous year. During the reporting period, the yield of optical materials products increased, costs were reduced through measures such as production process optimization, etc., and the gross sales margin of some products increased year-on-year, leading to steady growth in this sector's business. Xinhuaguang, a holding subsidiary of the company, has been growing steadily in its overall business development in recent years, striving to expand the high-end military market, and its production and sales volume are among the highest in the country. In this field, the company will continue to strengthen its pioneering efforts and strengthen its competitiveness in the terminal market. Risk warning: Order falls short of expectations.