The 1H19 performance is basically in line with our expectations, Aijian Group announced 1H19 results: total operating revenue of 1.95 billion yuan, +58% year over year; of these, operating income was 850 million yuan, +217% year over year, which is the increase in revenue from Aijian's import and export trade business during the reporting period and the increase in revenue after merging Huarui Leasing. The company's 1H19 net profit was 630 million yuan, +17% year on year; after deducting non-net profit of 730 million yuan, +24% year over year, the non-recurring profit and loss was mainly due to compensation of 160 million yuan due to Fangda Carbon's lawsuit against Aijian Trust. ROAE increased 0.15ppt to 6.34% year-on-year during the reporting period. Net profit for 2Q19 was 370 million yuan, +0.9%/+38% YoY/+38%, which is basically in line with our expectations. Development trend The main trust business is growing steadily, which is the main support for performance. Aijian Trust's 1H19 revenue was +14% YoY to $1.10 billion, and net profit +2.9% YoY to $590 million, accounting for 56%/93% of revenue/profit respectively. At the same time, Aijian Trust actively explored innovation and transformation, completed the launch of multiple supply chain finance-related business projects during the reporting period, and promoted technical and business cooperation with large-scale consumer finance platforms. In the context of the industry's continuous clean-up of compression channels and multi-level nested businesses, we expect that the scale of the company's active management will continue to increase and the trust return rate will continue to grow, driving steady growth in the company's performance. The leasing business increased significantly, and Huarui Leasing contributed to the increase in performance. Aijian Leasing 1H19's revenue was +46% year-on-year to 200 million yuan, net profit +7.3% year-on-year to 50.14 million yuan, and interest-bearing assets reached 5.16 billion yuan. Huarui Leasing (mainly aircraft and backup engine leasing) 1H19 brought in profits and contributed 50.89 million yuan, with interest-bearing assets exceeding 5 billion yuan. At the same time, Aijian Leasing continues to strengthen its utility business, increase its business investment in the medical and education sectors, and actively explore innovative business models such as logistics, urban service upgrades, energy and environmental protection. The majority shareholders have shown confidence by continuing to increase their holdings, and the diversified financial layout has achieved remarkable results. As of July 1, Junyao Group, the majority shareholder of the company, increased its holdings of the company's shares by 16.22 million shares, accounting for 1% of the company's total share capital. At the same time, it was announced that the company's shares will be increased by a minimum of not less than 0.1% and a maximum of 0.5% within 6 months from July 3. Furthermore, in terms of diversified financial layout: the company actively adjusts and directly manages its AIJIAN assets and AIJIAN industries, preliminarily formulates a strategic plan for Aijian Hong Kong, and explores the development direction of professional industrial funds. Profit forecasting and valuation Taking into account non-operating expenses caused by lawsuits, we reduced net profit in 2019 by 6% to 1.36 billion yuan, leaving net profit unchanged at 1.7 billion yuan in 2020. The company's current stock price corresponds to 1.3 times P/B in '19, maintaining the outperforming industry rating, and lowering the target price by 19% to 11.99 yuan, corresponding to 1.8x P/B in '19 and 14.3x P/E in '19, with 35% room compared to the current stock price. Venture trust and leasing business growth and asset quality fell short of expectations; regulatory uncertainty.