On the evening of August 9, 2017, Compton disclosed its 2017 mid-year report. The company's operating income for the first half of 2017 reached 487 million yuan, up 23.29% year on year; net profit from net profit reached 754.75,800 yuan, up 28.07% year on year. Basic earnings per share fell from 0.67 yuan to 0.38 yuan due to high turnover during the reporting period. In the first half of the year, the new Huangdao plant of the company's fund-raising project met the conditions for equipment commissioning, and production capacity will be gradually released in the second half of the year. Performance increased by nearly 30% year on year. Product sales in the second half of 2017 ushered in a peak season. In the first half of 2017, the company's revenue and net profit growth rates were higher than 20%, and continued to maintain a steady growth trend. Revenue growth for all main business products other than car maintenance products was higher than 30%. The company's main product, automotive lubricants, achieved sales revenue of 434 million yuan, an increase of 30.17% over the previous year. This portion of revenue accounted for 89% of total revenue. Industrial lubricants and antifreeze achieved revenue of 38.19 million yuan and 5.12 million yuan respectively, an increase of 34.33% and 44.39% over the previous year; automobile maintenance products achieved revenue of 9.02 million yuan, a slight decrease of 3.77% over the previous year. There are obvious seasonal differences in the products operated by the company. Generally speaking, the second quarter is the low season of the year, and business demand enters the peak season from September. Market demand will maintain strong market demand in the third and fourth quarters, and the company's product sales are expected to experience greater growth in the second half of the year. The new Huangdao plant is expected to be put into operation in the second half of the year, adding 80,000 tons of lubricant production capacity to the company's fund-raising project. The new Huangdao plant will meet equipment commissioning conditions in the first half of the year, and will gradually release production capacity in the second half of the year. The post-delivery project can produce 80,000 tons of lubricant, 20,000 tons of antifreeze, and 1,000 tons of brake fluid per year. Lubricant production capacity has tripled: before production, the company's lubricant production capacity remained at around 40,000 tons per year, with a capacity utilization rate as high as 110%, and a production and sales rate as high as 99%; after production is put into operation, the company's lubricant production capacity will effectively increase to 96,000 tons per year, an increase of 140% over the previous year, and production and sales volume is expected to increase 1.4 times. After reaching 100% production, production capacity tripled compared to before production was put into production. Assuming that the project is officially put into operation in the fourth quarter and that the production and sales rate level remains stable, the company's production and sales volume may reach about 40,000 tons in the second half of 2017, and this sales revenue may reach 620 million yuan, which can drive a 38% increase in total revenue over the first half of the year. Antifreeze production capacity is doubled: before production is put into operation, the production capacity of antifreeze is 20,000 tons/year, and car maintenance products are 1,000 tons/year; after production is put into operation, the production capacity of antifreeze is expected to double, the production capacity of brake fluid will increase by 1,000 tons/year, and production and sales are expected to increase significantly. High-end products+ positions the AM market, benefiting from the increase in car ownership and the upgrading of the consumption structure, Compton is the leading private manufacturer of middle and high-end lubricants in China. The company's main automotive lubricants are high-end SJ, SL, SM, and SN grade gasoline engine oils and CI-4 and CJ-4 diesel engine oils. In the first half of the year, the company continued to launch high-end diesel engine oil Extreme Protection 850 and fully synthetic GT950X gasoline engine oil, closing the gap with most domestic lubricant companies in terms of product quality. In recent years, national income has continued to grow, and the upgrading of the consumption structure has gradually accelerated. The domestic lubricants market has shown a “double increase” trend where the share of automotive lubricants has gradually increased and the proportion of middle to high grade lubricants has gradually increased. The company's differentiated product positioning in the middle and high-end will greatly benefit from the trend of upgrading the consumption structure of automotive lubricants. Unlike the market situation where the OEM and OES markets are mainly dependent on automobile sales, the AM market, which the company mainly targets, benefits from car ownership and growth. The average growth rate of car ownership in China over the past 10 years has reached 14%, far higher than the world's growth rate of about 5% in the same period. By the end of June 2017, the number of cars owned had reached 205 million, and the growth rate had slowed to 12%. The company's future sales revenue growth will depend more on market share expansion. As of June 2017, the company had more than 600 major dealers nationwide, with a marketing network covering 30 provinces and cities. Benefiting from the continuous growth of domestic automobile ownership and the continuous improvement of the company's marketing network, the company achieved sales volume of 28,000 tons of automotive lubricants in the first half of 2017, and sales revenue reached 434 million yuan, achieving steady growth. In the future, the company will continue to enter the OEM market and e-commerce market, increase development efforts for automaker customers, continue to expand sales channels, and sales revenue is expected to increase further. Profit forecasts and investment ratings assume that new production capacity projects will be put into operation in the fourth quarter of 2017. We expect that in 2017-2019, the company's operating income will be 1,124 billion yuan, 1,461 billion yuan, and 1,789 billion yuan, EPS will be 0.80 yuan, 1.10 yuan, and 1.32 yuan respectively. The latest closing price corresponding to PE is 31 times, 22 times, and 19 times, respectively, giving it an “increase in holdings” rating. Risks suggest that the price of raw materials has risen more than expected, the start time of new projects has not met expectations, and the production and sales rate has fallen short of expectations