The incident described Lu Xin Venture Capital's 2016 mid-year report. During the reporting period, it achieved operating income of 88 million yuan, down 7.24% year on year; investment income of 448 million yuan, up 19.90% year on year; owned net profit of 308 million yuan, up 37.53% year on year; and weighted return on net assets of 8.60%, up 2 percentage points year on year. Incident Review's performance contribution mainly comes from cash dividends and investment benefits brought about by asset reclassification. The company's main abrasives business grew weakly during the reporting period, achieving operating income of 88 million yuan, a year-on-year decline of 5.21%; however, investment income increased steadily. Among them, Minsheng Securities and Shandong International Trust's cash dividends contributed 7486.71 million yuan and 247.24,800 yuan respectively. At the same time, investment income increased by 271 million yuan due to loss of significant impact, leading to an increase of 271 million yuan in investment income. The pace of project withdrawal is accelerating, and performance is expected to continue to grow in the second half of the year. In August, the company continuously reduced its holdings of Tongyu Heavy Industries by 10 million shares through bulk transactions, returning a total of 121 million yuan in capital, achieving investment income of 101 million yuan and increasing annual operating performance. Currently, the company holds shares in 9 listed companies. Many of these projects have passed the ban period. Eighteen projects have been listed on the New Third Board, and 9 have applied for IPOs. Among them, Guao Electronics has already passed the meeting. As the pace of the company's exit accelerates, future performance still has momentum for growth. The investment model continues to innovate. In the first half of the year, the company accelerated the fund creation process, increased cooperation with industrial capital, tested the waters and cooperated with listed companies to establish civil-military integration funds; at the same time promoted the transformation of specialized investment funds, set up separate health and new materials funds for specialized investments; continued to increase the investment of regional industrial funds, participated in the establishment of the Sichuan Strategic Emerging Industry Venture Capital Fund and the Lu Xin Bank Industrial Investment Fund to improve the business layout in Sichuan and Shandong. Since 2016, 5 new funds have been established, with a total size of 3.1 billion yuan, and the company has pledged an investment of 1,295 billion yuan. Integrate business platforms and increase overseas investment. The company has strengthened the management of overseas companies, integrated overseas investment platforms, and reduced management levels. After Lu Xin's investment transfer is completed, Qilu Investment will become the company's overseas investment platform; at the same time, the company increases its overseas asset allocation, and the Intarcia project is expected to become the first investment business in the US, which has now been reviewed and approved by the shareholders' meeting. We continue to be optimistic about the company's future development prospects, mainly due to: 1. The construction of multi-level capital markets is becoming more and more perfect, and companies have plenty of exit channels such as new third board and mergers and acquisitions; 2. The company holds 9 listed projects, 9 IPOs, and 18 new third board projects, with sufficient project reserves; 3. The establishment of new funds is accelerating, and there is plenty of potential for future growth. The company's EPS for 16 and 17 is expected to be 0.48 and 0.57, and the corresponding PE is 47.28 and 39.94 times, maintaining the recommended rating.