Event: The company released its 2017 semi-annual report. During the reporting period, it achieved operating income of 487 million yuan, a year-on-year increase of 23.29%, net profit attributable to shareholders of listed companies of 75.48 million yuan, a year-on-year increase of 28.07%, non-net profit attributable to shareholders of listed companies of 74.39 million yuan, a year-on-year increase of 27.41%, and an EPS of 0.38 yuan. Comment: 1. The troika of automotive oil, industrial oil, and maintenance products goes hand in hand; the Huangdao project is put into operation to ensure growth. In terms of automotive lubricants, while the advantages of the traditional AM market continue to expand, the company is actively expanding the OEM market; in terms of industrial lubricants, it adheres to the middle and high-end brand positioning, is based in the steel, cement, mining, electricity, chemical and other industries, and is steadily expanding the industrial oil market; in terms of Lubang maintenance products, the company has strengthened the construction of a “Lubang car maintenance and upgrade image store” by increasing support for dealer policies and developing diversified sales models. In April 2017, the Huangdao New Industrial Park with a design capacity of 100,000 tons/year was officially put into operation. Production capacity will be gradually released in the second half of the year. After delivery, the project can produce 80,000 tons of lubricants, 20,000 tons of antifreeze, and 1,000 tons of brake fluid per year. The company is at the leading level in the country in terms of hardware such as production scale, product technology, and operating efficiency, laying a solid foundation for subsequent development. 2. The domestic automotive lubricants market continues to grow, and product demand is high-end, and the company will benefit. With the rapid development of China's economy, the continuous acceleration of the industrialization process, and the continuous growth of automobile ownership, China has become the world's largest consumer and producer of lubricants, and is one of the few countries in the world that has maintained continuous growth. According to “WorldLubricants” published by Freedonia Group (an industrial market research and consulting company), the total demand of China's lubricant market will reach 10.2 million tons in 2017, while the total domestic lubricant production in 2016 was 6.87 million tons. The market gap is obvious. As the country's environmental policy becomes stricter, the share of high-end, high-quality lubricants will gradually increase in the future, while the lubricant market segment will become more sound, and profit margins will increase accordingly. 3. The company's products target the automotive aftermarket, and the marketing channels are competitive. The company has been developing steadily in the Chinese lubricants, automotive care products and automotive chemicals market. The products cover various types of automotive lubricants, industrial lubricants, motorcycle lubricants, grease, antifreeze, brake fluids, etc., which can provide comprehensive and efficient lubrication and maintenance solutions for vehicles and equipment, and can develop special oils according to customer requirements. It has obvious advantages in technical fields such as nanoceramic engine oil, nano-anti-wear agents and synthetic industrial oils. Its marketing network for COPTON (Compton) brand lubricants and Roab (Luban) brand car care products covers 31 provinces, cities and autonomous regions across the country, has more than 600 first-class dealers, and has formed a highly competitive marketing system. 4. The investment proposal predicts that the company's net profit from 2017 to 2019 will be 1.6, 2.02, and 2.53, respectively, corresponding to EPS of 0.80, 1.01, and 1.26 yuan, respectively. The current stock price is 26.21 yuan, and the corresponding PE is 33, 26.1 and 20.8 times, respectively. Considering that the company has been listed for the first time, coverage for the first time, there is no rating yet. Risk warning: International crude oil and product prices fluctuate greatly; projects under construction are progressing less than expected.