Event: Company announcement 2020 semi-annual performance forecast: In the first half of 2020, the company expects to achieve net profit of about 2799-32.49 million yuan, a year-on-year increase of about 25.18%-45.31%. Key investment points: The performance exceeded expectations, confirming the bank's IT boom. The pandemic in the first half of 2020 made business implementation more difficult. Revenue confirmation for some customers was delayed, and the company's performance in the first quarter was under great pressure. However, the performance forecast showed that the company's business recovery in the second quarter was relatively good. The company achieved net profit of about 312.8-35.78 million yuan in Q2 in a single quarter, an increase of 81%-107% over the previous year, a significant improvement in revenue growth of about -31.75% compared to Q1. Excluding the impact of non-recurring profit and loss, the company's net profit growth rate range for the first half of the year was 16%-38%. The company's performance grew beyond expectations in the context of the adverse effects of the epidemic and the expansion of staff size. We believe there are two main reasons: 1) Bank IT prosperity is high, and downstream demand for software systems represented by the behavior of large banks is increasing; 2) Bank IT's traditional human resource outsourcing business model is changing. The bank IT market size and profit margin have increased under the general contract subcontracting model. A new cycle of banking technology has begun, and we are optimistic that the share of leading IT banks will increase. Capital expenditure on banking technology is cyclical, as reflected in IT hardware replacement and software transformation every 5 years or so. We believe that since the second half of 2019, banking technology has entered a new development cycle. In addition to the traditional system software upgrade requirements, there are two overlapping factors in this round of bank IT cycle: 1) the country has implemented an autonomous and controllable strategy for fintech, and large banks need to domestically replace integrated equipment and basic software; 2) cloud computing has become one of the main infrastructures of banks, and demand for private cloud and hybrid clouds is expanding. We believe that the current bank IT construction will combine factors such as autonomy and control, financial clouds, and digital currency, and that the technology investment and sustainability of large banks will surpass that of the past. At present, all banks have increased their investment in fintech. According to each bank's annual report, the four major banks all invested more than 11 billion yuan in technology in 2019, of which the company's core customer, CCB's fintech investment reached 17.6 billion yuan, accounting for 2.50% of CCB's revenue. We believe that under the double influence of increased downstream demand and the increase in the level of commercialization of bank IT, bank IT market concentration may increase, and we are optimistic about the increase in the share of leading markets. Profit forecast and investment rating: Maintain a “buy” rating. We believe that the banking technology business is in an upward cycle, and the company will clearly benefit as a leading bank IT company. We expect the company's EPS in 2020-2022 to be 0.40/0.52/0.64 yuan, respectively, and 45/35/28 times the PE corresponding to the current stock price, respectively, to maintain the “buy” rating. Risk warning: 1) the risk that the digital currency is not progressing as fast as expected; 2) the risk that the company's performance falls short of expectations; 3) systemic risk.