The amount of on-hand orders is impressive, and operating income has increased markedly. The gross margin declined slightly. The company signed a new order of 2,033 million in the first half of '17. Currently, the company has $3,542 billion in on-hand orders, accounting for about 123.11% of revenue in 2016. The amount of on-hand orders is impressive. In the first half of '17, the company achieved revenue of 1,951 billion yuan, an increase of 15.36% over the same period last year. Among them, the company's traditional main business, building decoration business, had revenue of 1,832 million yuan, up 17.16% year on year; vocational education business revenue was 119 million yuan, down 6.72% year on year. Among them, subsidiary Xuelson's revenue was 454.363 million yuan, down 28.10% year on year, and Shangxue cross-examination revenue was 71.4705 million yuan, up 15.34% year on year. The company achieved revenue of 1,221 billion yuan in the second quarter, an increase of 66.87% over the previous year. There are clear signs of speeding up performance. We used the “gross margin - operating tax and additional/sales revenue” index to remove changes in accounting standards brought about by “business change to growth”. Using this indicator, we calculated that the company's gross margin for the first half of '17 was 20.03%, down 1.79 percentage points from the same period last year. This is mainly due to the decline in gross margin brought about by the increase in operating costs of the decoration business. The expense ratio for the period was basically stable, and net profit for the single quarter increased markedly. The company's expense ratio for the first half of '17 was 12.40%, an increase of 0.6 percentage points over the previous year. The sales expense ratio was 5.44%, up 0.28 percentage points from the previous year; the management expense ratio was 6.94%, down 0.65 percentage points from the previous year, and the company's management capacity improved; and the financial expenses ratio was 2.02%, up 0.97 percentage points year on year, mainly due to the increase in interest-bearing debt during the reporting period compared to the same period last year. Net profit attributable to shareholders of listed companies was 104 million yuan, a year-on-year decrease of 17.22%. The company achieved net profit of 53.3 million yuan in the second quarter, a year-on-year increase of 23.54%, a significant acceleration. The net profit of the subsidiary Xuelson was 16.1043 million yuan, a year-on-year deterioration of 75.91%. Shangxue obtained a net profit of 9.4939 million yuan in the first half of the year, an increase of 19.78% over the previous year. The company expects net profit from net income of 125 million yuan to 231 million yuan in the first three quarters, with a fluctuation range of -40% to 10%. Operating cash flow improved, and the payout ratio declined significantly. The company's revenue ratio for the first half of '17 was 0.6456, up 1.93 percentage points from the previous year. The current payment ratio was 0.9076, down 17.56 percentage points from the previous year. The significant decline in the pay-as-you-go ratio may be due to the large year-on-year increase in operating costs (20.75%). Take a comprehensive look. The cash flow from the company's operating activities in the first half of '17 was -358 million yuan, up 29.83% year on year. The implementation of the third phase of the equity incentive plan is expected to promote performance growth. In the first half of '17, the company launched the third phase of the equity incentive plan, expanded the incentive target to 311 people, and set corresponding revenue growth rate assessment targets for the three periods in 17-19 where sales restrictions were lifted, increasing 12%, 24%, and 36%, respectively, over 2016. Equity incentives bind the interests of company management and owners, and the company's performance is expected to grow steadily in the future. Investment advice The company continued to consolidate its main decoration business, and its performance in the single quarter accelerated markedly. At the same time, vocational education resources are integrated, and vocational education business is carried out in an orderly manner. The company's management changed in September 2016, and it is expected that a more active management approach will continue to improve the company's future performance. There is an inflection point in performance. We expect the EPS in 2017-2019 to be 0.12, 0.14, and 0.17, and the corresponding PE of 54, 45, and 37 times, maintaining the “buy” rating. Risk Warning: Real Estate Investment Growth Continues to Decline