Event: Company announcement: The first three quarters of 2014 achieved revenue of 895 million yuan (+11.7%), net profit attributable to the parent company of 31.14 million yuan (+67.9%), corresponding to EPS of 0.11 yuan; revenue of 309 million yuan (+15.1%) in July-September, net profit attributable to the parent company of 11.39 million yuan (+130%), corresponding to EPS of 0.039 yuan, and performance in line with expectations. The company expects the net profit attributable to the parent company to change by 40-70% in 2014. Key investment points: Revenue growth is progressing steadily. Currently, mobile communications are in the stage of switching from 3G to 4G. Shipments of sim cards are generally stable, and benefiting from the continuous expansion of financial IC cards, the company's revenue growth rate has maintained a steady and progressive trend. The revenue growth rates for the first three quarters in a single quarter were 5.94%, 14.0%, and 15.1%, respectively; 2 gross margin improved year-on-year, and cost control was effective. In the third quarter, the company's gross margin was flat month-on-month, up 1.32 percentage points year on year, while the period expense ratio fell 2.37 percentage points year on year, and profitability continued to improve. We expect that with the further spread of financial IC cards, the industry may gradually enter a stage of strict cost control. As a traditional card manufacturer, the company's ability to control costs and seize market share may be better reflected at this stage; the determination of the transformation platform operator is firm. The card manufacturing industry is clearly cyclical. Since the second half of the year, financial IC cards have also gradually moved from the honeymoon period to the stage of cost competition. The operating pressure on the industry has increased, and card merchants, including companies, such as Hengbao and Tianyu, are also seeking transformation one after another. In line with the interests of the Ministry of Housing and Construction to compete for the dominance of the One-Card Card, the company also wants to rely on it to achieve transformation, and the determination of both sides is firm; the construction of the 2-City Union platform is progressing steadily, and future expectations are expected to be fulfilled one after another. Platform construction is progressing steadily, and it is expected that it will be able to connect with public transportation systems in some cities within the year, thus enabling the development of online users. In particular, the connectivity conference hosted by the Ministry of Housing and Construction at the end of this month is worth looking forward to. We expect more progress to be announced at that time; in transforming the operating model, the value of the platform is still underestimated. Relying on the CityLink platform, the company's profit models will be more diversified in the future. We anticipate that in addition to the announced per-app download charges, the company may also profit by getting involved in the operation of the Pass Card Company and participating in the settlement sharing of the One Card in the non-public transportation sector. Using only the more than 160 cities that currently issue cards according to the Ministry of Housing and Construction's standards, we estimate that more than 400 million cards will be issued in total. We expect that the number of users who will migrate to online payments will reach more than 100 million in the future, and its platform value is far from being reflected in stock prices; 2 It continues to be highly recommended. Without considering the profit of the operating business for the time being, the EPS is expected to be 0.24/0.32/0.41 yuan in 14-16, which is 69/52/40 times the corresponding PE. In the future, if Citylink data can successfully expand online business and occupy mobile payment portals and online portals, then the number of users is expected to reach 100 million, the platform value is huge, and the “highly recommended” rating will be maintained; risk warning: the price reduction of smart cards has exceeded expectations; the progress of Citylink data's business development is uncertain; and competition in the mobile payment market is fierce.