The company recently signed a “Strategic Cooperation Agreement” with the Shenzhen branch of Industrial Bank. Industrial Bank agreed to provide the company with an intentional credit line of 600 million yuan. At the same time, the company announced the main operating conditions for the second quarter. A total of 2,732 billion new contracts were signed this year, an increase of -8.84% over the same period. The review is as follows: There were sufficient orders in hand in the second quarter. The growth rate of new orders was changed from negative to positive. The company signed new orders of 1,767 billion yuan in the second quarter of '20, up 0.63% year-on-year in a single quarter, a significant increase of -22.32% from the growth rate of new orders in the first quarter of '20; the cumulative number of new orders signed this year was 2,732 billion yuan, up -8.84% year on year. On the one hand, the sharp increase in single-quarter growth in the second quarter was due to the impact of the epidemic, and the company's new orders in the first quarter were postponed to the second quarter; on the other hand, as the company increased its business development efforts, public decoration business orders and design business orders increased by 12.78% and 36.54%, respectively. As of the end of the second quarter, the company had orders of 8.718 billion yuan, an increase of 3.18% over the previous year. Currently, the on-hand order revenue ratio is 1.79, and the order amount is sufficient, which can support the company's continued growth in the future. Blockchain construction has achieved phased results. The tax enterprise cooperated to jointly build a “tax-industry” alliance chain. Recently, the company and Industrial Bank Shenzhen Branch signed a “Strategic Cooperation Agreement”. Industrial Bank agreed to provide the company with an intentional credit line of 600 million yuan and cooperate with the company in IDC, cloud computing and blockchain. The development of the company's blockchain business has achieved phased results. Previously, the company had signed “strategic cooperation agreements” with the Agricultural Bank, Bank of Communications and other organizations, and received a total of 7.3 billion yuan of intentional credit lines. The bank will connect to the Zhongzou Construction Blockchain technology platform to provide supporting financial products and financing support to enterprises connected to the platform. Furthermore, in May, the Shenzhen Taxation Bureau signed a cooperation framework agreement with Tencent Group, Ping An Group, China Construction and Sunwoda Electronics Co., Ltd. to jointly build a “tax-industry” alliance chain. This tax-enterprise cooperation opens up barriers to connectivity in the tax chain, financial chain, and industrial chain, and all parties in the alliance chain can achieve substantial and strong collaboration, thereby reducing costs, improving collaboration efficiency, and stimulating the vitality of the real economy. Entering IDC to “lay the foundation” for new infrastructure to help implement the technology transformation strategy, the company established the IDC business as the company's second main business this year. According to the company's official website, the company's IDC business layout will focus on the core regions of Beijing, Shanghai, Shenzhen and the Guangdong-Hong Kong-Macao Greater Bay Area. Currently, a technology company platform has been set up and corresponding technology teams have been formed. Following the signing of an investment framework agreement with IDC service company Anxun Group in February of this year, the company acquired a controlling interest in the Shunde (Wusha) data center project in Foshan in June of this year. The project is located in the core area of the Greater Bay Area in Guangdong-Hong Kong Bay and can meet customer customization needs and multi-operator line access requirements. Driven by the development of the digital economy and the dividends of new infrastructure policies, this entry into IDC is an important step for the company to implement its technological transformation strategy. It is also a “groundbreaking ceremony” for extending into the field of “new infrastructure” to enhance the company's competitiveness and overall level of development. Investment advice The company has actively increased investment in technology, and has achieved phased results in the blockchain and IDC business. We have maintained the company's EPS of 0.44, 0.54, and 0.70 yuan/share, corresponding PE of 22, 18, and 14 times. As technological expansion continues to show results, the company's technological attributes are getting stronger, which should be reflected in the corresponding valuation. We raised the target price from 12.5 yuan to 13.5 yuan to maintain the “buy” rating. Risk warning: Blockchain technology research and development risks; IDC construction progress falls short of expectations; upgrading decoration consumption is slowing down