Event description The company released its 2016 semi-annual report. The company achieved revenue of 1,203 billion yuan in the first half of the year, an increase of 13.50% over the previous year, and net profit of 92 million yuan, an increase of 17.29% over the previous year. Meanwhile, “Chunxing New Energy” plans to establish “Chunxing Photovoltaics” in Huizhou with its own capital, with a total investment of 23 million yuan. Core view The communication radio frequency business performed well in the first half of the year, and we are optimistic about the development throughout the year. In the first half of 2016, mobile communication radio frequency devices achieved revenue of 569 million yuan, a year-on-year increase of 66.2%, and gross margin increase of 2.30%. Benefiting from changes in procurement models for downstream customers Ericsson and Nokia, the company achieved rapid expansion through fixed production expansion and cost control. We expect the growth rate of the communications radio frequency business to maintain 30% growth throughout the year. The transformation of the military industry and aerospace industry is firm, and consumer electronics products are rapidly gaining momentum. Beijing Chiyilong focuses on supporting the army's core equipment and has four complete military products; Xi'an Xinghang mainly produces titanium alloy and aluminum alloy structural parts for domestic and foreign military aircraft and civil aircraft, and has signed strategic cooperation agreements with Shen Fei Civil Aircraft and Shen Fei International, and plans to set up a large-scale surface treatment plant in the Shenyang region. The company's future development goals are clear, and the transformation is firm. At the same time, consumer electronics structural components achieved revenue of 105 million dollars in the first half of the year, an increase of 84.28% over the previous year, and gross margin increased by 3.53%. Benefiting from popular sales of downstream customers OPPO and Meizu phones, and the timely layout of future metal frames and 3D glass, we are optimistic that the consumer electronics sector will achieve high compound growth of 65% in the next three years. Invest in the establishment of “Chunxing Photovoltaics”, and distributed solar power plants enter new energy sources. “Chunxing New Energy”, a subsidiary of the company, plans to invest 23 million yuan to establish “Chunxing Photovoltaics” and build a 3.6 MW distributed solar power plant in Huizhou. This investment will provide the Huizhou plant with 3.6 million degrees of clean energy per year and lay the foundation for the company's future large-scale investment in the Pearl River Delta region. Financial forecasting and investment recommendations We forecast the company's earnings per share for 2016-2018 to be 0.27, 0.34, and 0.42 yuan respectively. Short-term reference to the company's valuation of RF devices, chassis processing, and Tesla concepts is comparable, corresponding to 45 times PE in 2016. We have given a target price of 12.15 yuan, which is the first purchase rating. Risks suggest that the localization rate of radio frequency devices and the penetration rate of metal cases are slowing down, and that the progress of fixed growth and expansion of production is lower than expected, and that progress in the automotive, military and aerospace business is lower than expected