Event: On August 29, the company released its 2016 semi-annual report. During the reporting period, the company achieved operating income of 356,402,581.53 yuan, an increase of 89,574,786.60 yuan over the same period last year, an increase of 33.57%; the company realized net profit attributable to shareholders of listed companies of 69,104,024.62 yuan, an increase of 35,798,458.60 yuan over the same period last year, an increase of 107.48%. The profit distribution plan is based on 471,162,968, to distribute cash dividends of 0 yuan (tax included) to all shareholders for every 10 shares, 0 bonus shares (including tax), and transfer 30 shares to all shareholders for every 10 shares from the capital reserve fund. Comment: The photovoltaic business is growing rapidly. During the reporting period, the company's operating income increased by 33.57% year on year and net profit increased by 107.48% year on year. The main reason for the change was the increase in PV business revenue. By business, the photovoltaic power generation business achieved operating income of 28 million yuan, an increase of 503.40% over the previous year, and gross margin as high as 63.40%. The photovoltaic power generation equipment business achieved revenue of 105 million yuan, with a gross profit margin of 11.37%. Meanwhile, the revenue of the traditional fine chemicals business, new materials business, and indoor environmental treatment business decreased by 4.68%, 37.90%, and 51.64%, respectively. It shows that the company has completed the initial transformation, and the photovoltaic business has become a new growth point for the company's performance. Build an integrated network of optical storage and charging, implement the “four comprehensive” strategy, and create a new rainbow. In addition to actively deploying photovoltaic power plants, the company will further expand the four major businesses of new energy vehicles, energy storage, charging stations, and energy internet. The energy storage policy continues to advance and is poised to go. 2016 will be the most outstanding performance in the field of energy storage. In March, the company announced that the company plans to use its own capital of RMB 8 million to acquire Feiran Venture Capital to hold all of Beijing Baineng's shares, or 8% of the shares. After the above equity transaction is completed, the company will increase the capital to Beijing Baineng by RMB 79.75 million and subscribe to 55.25 million shares of Beijing Baineng. After the above share transfer and capital increase, the company will hold 51.078% of Beijing Baineng's shares. Beijing Baineng's business is located in the fields of energy storage photovoltaic power plants, smart microgrids, energy storage power banks, new energy vehicle charging stations, and intelligent operation and maintenance of photovoltaic power plants. At the same time, it is stipulated that the net profit of Beijing Baineng in 2016-2018 is promised to reach 2000, 40, and 60 million yuan. In the field of energy storage photovoltaic power plants, the model of an energy storage power bank is used to improve the economic efficiency of power plants and achieve applications such as smoothing photovoltaic power generation, cutting peaks and filling valleys; in the field of charging stations for new energy vehicles, Beijing Baineng and China Highway Engineering Consulting Group Co., Ltd., a wholly-owned subsidiary of China Communications Construction Co., Ltd., signed a “strategic cooperation agreement on electric vehicle charging stations” in major regions and road networks across the country. The two sides plan to set up joint ventures to build new energy vehicle charging stations integrated with photovoltaic storage in all major regions and road networks of the country, forming a “four vertical, two horizontal and three rings” intercity charging network; zinc batteries are the mainstream of international bromine storage One of the energy technologies. Beijing Baineng has large-scale production capacity for key materials for zinc-bromine batteries. It has built a production line for key battery materials and battery components, including diaphragms, electrodes, electrolytes, etc., and has mastered the material formulation and production process. The production cost has been reduced to one-third of similar international products; it has the ability to integrate battery production and systems. Beijing Baineng has set short, medium and long-term development goals for itself. Through a strategic layout, it has seized market resources, merged, and absorbed energy storage technology, and realized commercialization and large-scale development of energy storage technology. In terms of establishing an integrated optical storage and charging network, on June 13, the company issued the “Notice on Foreign Investment and Establishment of Wholly-owned Subsidiaries”, stating that the company used its own capital to set up wholly-owned subsidiaries in 15 regions including Beijing, Shanghai, Tianjin, Chongqing, Guangzhou, Shenzhen, Zhengzhou, Jingdezhen, Xianning, Wuxi, Dongguan, Huizhou, Shantou, Chaozhou, and Qinghai Lake to promote the integration of the company's optical storage and charging. Through mergers and acquisitions, the company has acquired 100% of the shares of Huzhou Jingsheng Photovoltaic Technology Co., Ltd., 100% of the shares of Ningxia Jieyang Zhongyuan Electric Power Co., Ltd., and 100% of the shares of Xinyu Deyou Solar Power Co., Ltd. to continuously expand the new energy industry and technology fields and build a new energy industry system at the forefront of the country. This year, the company will strive to achieve the goal of deploying 100 charging and switching stations nationwide in 2016. To this end, it will build support for the development of the three major industries of “New Energy Internet+Energy Storage”, “New Energy Vehicle Platform+Operation”, and “Energy Internet+Finance”. Profit forecast: As the photovoltaic industry, energy storage and new energy vehicles enter the fast track, the company's various businesses are in a period of rapid performance release. We expect that under the gradual implementation of the 13th Five-Year Plan for National Photovoltaics, New Energy Vehicles, and Energy Internet, the company's EPS from 2016 to 2017 will be 0.46 and 0.91 yuan, respectively, and the corresponding PE will be 74X and 38X. We give a “buy” rating. Risk warning: The company's power plant expansion falls short of expectations, new energy vehicles and charging stations fall short of expectations, energy storage business development falls short of expectations, and changes in new energy policies, etc.