Incidents: The company released an interim report. The company's revenue for the first half of the year reached 604 million yuan, an increase of 17.79%; net profit after deducting non-profit reached 49.97 million yuan, an increase of 141.81% over the previous year; and earnings per share reached 0.071 yuan, an increase of 102.86%. The company's performance increased significantly compared to the same period last year, mainly because the company completed the acquisition of 100% of Senhua Yiteng's shares on January 18, 2016. The company's current financial report combined the financial report of Senhua Yiteng from February to June, and Senhua Yiteng achieved a total net profit of 37.01 million yuan from February to June. Firm acquisition, firm transformation: The company completed the acquisition of all shares in Senhua Yiteng in February 2016, with a transaction amount of 1.2 billion dollars. The value of Senhua Yiteng lies in: 1. Its core business is to provide customers with IDC and its value-added services. Its core customers include major Internet companies such as Xiaomi Technology, Jinshanyun, and Kugou Music, which have a stable source of orders and continuous profitability. 2. In an environment of explosive growth in the domestic public cloud market, the company's compound revenue growth rate from 2013 to 2015 was over 40%, and the compound net profit growth rate was over 200%, with obvious potential for development. 3. Senhua Yiteng promised that net profit after deduction in 2016 and 2017 would not be less than 88.4 million yuan and 12023 million yuan respectively, which would bring considerable cash flow. Judging from the five-month profit for the above half year, there is basically no problem with Senhua Yiteng fulfilling this year's performance promise. New IDC project, new development ideas: The company signed the “Rongtai Cloud Computing Data Center Project Investment Intent Cooperation Agreement” with the Zhangbei County People's Government in April 2016. The company will invest in the construction of the Rongtai Cloud Computing Data Center project in Miaotan Industrial Park in Zhangbei Economic Development Zone, with a total investment of about 1.5 billion yuan and a construction capacity of 8000 cabinets. As the company promotes project construction, it will receive support from the Zhang Bei government to set up infrastructure construction funds for the project. In addition, it will also receive full support in terms of land, networks, and electricity. The technical environment and infrastructure requirements of IDC computer rooms are high, and site selection greatly affects the company's cost level and service capacity and direction. Land costs, electricity costs, and network quality are critical. After active planning and consideration, the company set up a cloud computing subsidiary in Zhangbei and rapidly deployed cooperation, demonstrating the firm determination of the company to enter remote IDC projects, and the profitability of the new IDC project is worth looking forward to. Getting rid of dependence on a single chemical business, the pace of transformation is firm: the domestic and foreign chemical industry continues to be sluggish, causing the production and sales business of the company's original main products such as ML amino composites, phthalic anhydride, plasticizers, and dioctyl esters to decline for several years, and exports have also been hit. The company's chemical business continues to shrink, and the plight is already very obvious. Contrary to the revenue and cost advantages of the cloud computing industry and the current exponential growth situation on the data demand side, it will grow rapidly. We expect the company to take IDC and cloud computing businesses as new core businesses. Profit forecasting and investment advice: The merger and acquisition of Senhua Yiteng and the construction of high-performance and low-cost IDC computer rooms in remote areas will greatly enhance the competitiveness of the company's cloud computing and IDC business and help the company achieve leapfrog development across industries. The company's 2016-2018 EPS is expected to be 0.16 yuan, 0.19 yuan, and 0.32 yuan, corresponding to PE 63/52/31 X. We are optimistic that the company will benefit from the development of the cloud computing and IDC industries and give it a “buy” rating. Risk warning: Cloud computing/IDC business development falls short of expectations, risk of IDC project failure in Zhangbei region, risk of increased competition in the IDC industry, and rapid contraction of the chemical business has placed the company under heavy restructuring pressure.