The company achieved operating income of 10.484 billion yuan in 2019H1, an increase of 72.58% over the previous year; realized net profit of 3.02 billion yuan, an increase of 54.99%; 19EPS of 0.22 yuan and 19BVPS of 2.99 yuan. Net profit increased sharply, and the share of credit business declined significantly: 1) The company's 19H1 achieved revenue of 10.484 billion yuan, an increase of 72.58% over the previous year; realized net profit of 3.02 billion yuan, an increase of 54.99% over the previous year. The net interest rate and annualized ROE of the 19H1 company were 30.43% and 8.54%, respectively, and the ROE was higher than the industry average (6.93%). 2) The revenue of self-operated, brokerage, credit, asset management, and investment banking businesses was 27%, 20%, 13%, 5%, and 5%, respectively. Among them, the credit business's share decreased by 9 percentage points compared to 18 years. Self-operated investment boosted performance growth, and investment bank revenue increased 1/3:1) 19H1 achieved self-operated business revenue of 2,862 billion yuan, an increase of 216% over the previous year, which became the main reason for the increase in performance. As of 19H1, proprietary assets amounted to 143.229 billion yuan, an increase of 5.30% over the beginning of the year. 2) 19H1 investment banking business revenue was 538 million yuan, an increase of 33% over the previous year. The underwriting amount of 19H1 corporate bonds was 66.690 billion yuan, with a market share ratio of 1.74%. In the first half of the year, the company's IPO underwriting amount reached 1.3 billion yuan, with a market share of 2.17%, breaking the situation of zero IPOs in '18. 3) 19H1 brokerage business revenue was 2.129 billion yuan, up 12% year on year. The custodial assets of 19H1 corporate securities clients were 2.96 trillion yuan, an increase of 23.85% over the end of the previous year. Credit and asset management revenue both declined, and the company successfully completed its Hong Kong stock IPO and ranked among A+H brokerage firms: 1) The company achieved asset management business revenue of 547 million yuan, a year-on-year decrease of 24%. As of 19H1, the company's asset management scale was 604.3 billion yuan, down 10% from the beginning of the year. 2) 19H1 credit business revenue was 1,401 billion yuan, down 28% year on year. As of 19H1, the balance of the two loans was 49.4 billion yuan, up 16% from the beginning of the year, and the balance of pledged stock repurchase assets was $32.3 billion, down 26% from the beginning of the year. 3) During the reporting period, the company was successfully listed and traded on the main board of the Hong Kong Stock Exchange, ranking among “A+H” listed brokerage firms. The newly issued 2,504 million H shares increased the company's share capital by 11.11% compared to before issuance, greatly increasing capital strength, and playing an important role in the company's asset-based business reform and transformation. Valuation Due to the decline in market conditions and a significant decline in activity in the second quarter, we lowered the company's net profit forecast for 19/20/21 from 59/69/77 billion yuan to 56/67/76 billion yuan, corresponding to EPS of 0.22/0.27/0.30 yuan, respectively, maintaining an increase in holdings rating. The impact of the introduction of risk warning policies on the industry has exceeded expectations; market fluctuations have a double impact on industry performance and valuation.