1H16 earnings preannounced to rise 380~410%YoY

    　　CNCR-IT preannounced that 1H16 net profit would rise380~410% YoY to Rmb47.9242~50.9194mn （includingRmb4.385mn non-recurring items）， beating our expectation ofRmb47mn.

    　　Trends to watch

    　　Stable main business and consolidation of STARCORboosted earnings.

    　　Deployment in big data for telecom and TV networkoperators with sound data quality.

    　　Active deployment in data monetization.

    　　Strategic cooperation with JUSFOUN BIG DATA toaccelerate technology and data monetization.

    　　Valuation and recommendation

    　　Considering stable business growth, we maintain 2016/17erevenue forecast at Rmb422mn and Rmb510mn and keep netprofit forecast at Rmb119mn and Rmb137mn.

    　　Considering expanded equity base, we lower TP by40.9% to Rmb36.17 （70x 2016e P/E）。 Maintain BUY.

    　　Risks

    　　Intensifying competition in DPI to reduce gross margin; slowprogress in cooperation with JUSFOUN BIG DATA and datamonetization.