[Event] The company announced its semi-annual report on the evening of August 29. [Comment] 1) Revenue continued to grow rapidly, and profits declined sharply year on year due to low gross profit of cathode materials and a decrease in investment income. ① Revenue for the first half of the year was 1,185 billion yuan, +58.64% year-on-year, maintaining rapid growth. Gross margin -4.82ppt to 14.68% yoy; net profit margin -5.00ppt to 3.16% yoy. ② By business, cathode materials revenue was 847 million yuan, +93.58% year on year, maintaining rapid growth, but gross margin fell sharply by 6.09ppt to 7.71% year on year; lithium battery equipment revenue was 251 million yuan, -4.83% year on year. There was a slight decline due to factors such as the slowdown in downstream production expansion. Gross margin was +0.51ppt to 30.13% year on year; rare earth luminescent materials revenue was 50 million yuan, +26.81% year over year, gross margin +4.89% to 12.83% year on year. ③ Net profit was 37.08 million yuan, a sharp decline of 39.98% year on year, mainly due to the sharp drop in gross margin of 6.09ppt year on year due to large fluctuations in raw material prices for cathode materials, and a sharp decrease in investment income compared to the same period last year. Haoneng Technology made a profit of 27.43 million yuan, contributing to the main performance. ④ Expenses are well controlled, and the period fee rate is -0.71ppt to 10.22% year-on-year. The sales expense ratio and management expense ratio decreased by 1.05ppt, 1.15ppt to 1.37%, and 6.85% year on year, respectively, but the financial expense ratio was +1.49ppt to 2.00% year on year, mainly due to the increase in interest expenses due to an increase in bank deposits. 2) The material+equipment strategy continues to advance. ① The subsidiary Haoneng Technology is a high-quality lithium battery equipment company. Customers include leading enterprises in the industry such as Ningde Shidai. It has recently won a large order of 364 million yuan from Ningde Times. The winning projects include coating machines, roller presses, and slitting equipment, etc., which will positively contribute to the company's performance. ② The company continues to promote lithium battery equipment business expansion and related mergers and acquisitions, and has now begun mergers and acquisitions with Shenzhen Yuchen Automation Equipment Co., Ltd. ③ The quality of products and customers in the company's cathode materials business continues to improve. The self-developed high-nickel ternary 811 series cathode materials have been officially mass-produced, with monthly orders exceeding 100 tons; high-voltage lithium cobalate cathode materials have passed multiple customer certifications, forming a pattern of production capacity such as orders. 3) Investment recommendations: The company's revenue for 2018-20 is estimated to be 3.37 billion yuan, 4.841 billion yuan and 5.765 billion yuan respectively, net profit of 144 million yuan, 201 million yuan and 254 million yuan respectively, and EPS of 0.68 yuan, 0.95 yuan and 1.20 yuan respectively, corresponding PE of 20.31, 14.60 and 11.54 times, maintaining the recommended ratings. Risk warning: The power battery industry has low expectations for production expansion, and industry competition is intensifying