Event: Wantong Technology announced the 2015 quarterly report: 2015Q1, the company achieved operating income of about 96.58 million yuan, a year-on-year decrease of 35.0%; operating profit of about 12.72 million yuan, an increase of 55.4% over the previous year; net profit attributable to shareholders of listed companies was 9.86 million yuan, an increase of 21.8% over the previous year, and EPS of 0.03 yuan. At the same time, the company predicted that the 2015 H1 performance would change by -20% to 30% year on year, and that net profit attributable to shareholders of listed companies would be about 17.48 million yuan to 28.4 million yuan. Comment: Revenue declined significantly year over year, and performance was generally in line with expectations. In 2015Q1, the company achieved revenue of about 96.58 million yuan, a year-on-year decrease of 35.0%, mainly due to the fact that most of the company's projects were in the construction period, and there were few project settlements. Net profit attributable to shareholders of listed companies in Q1 was 9.86 million yuan, an increase of 21.8% over the previous year, mainly driven by Q1's investment income of 8.79 million yuan. Huadong Electronics, a wholly-owned subsidiary of the company, has been engaged in port informatization business for many years. It owns the Chinese port network, and will fully explore the “China Port Network” (http://www.chinaports.com)作为互联网综合运营平台的商业价值,形成高度整合的“大物流”平台,物流信息化业务进展值得关注) in the future. Gross margin has increased dramatically, and management expenses have increased. The company's Q1 consolidated gross margin was 26.3%, an increase of about 7.2 percentage points over the previous year. In the 2014 annual report, the gross margin of the company's main business, except for system integration equipment, declined. We estimate that the main reason for the increase in Q1 gross margin may be a change in the revenue structure, and whether there is a trend change is yet to be further observed. In Q1, sales expenses increased by 20.2% year on year, management expenses increased by 17.1%, and the sales expense ratio increased to a certain extent. The two expense rates together increased by about 10.2 percentage points year on year. It is expected that the company's marketing and management expenses rate will also increase by a certain margin throughout the year compared to 2014. Accounts receivable have been drastically reduced, net operating cash flow has improved, and financial risk has been reduced. As of the end of the first quarter, the company's accounts receivable balance was about 180 million yuan, a decrease of about 90 million yuan from the beginning of the year, mainly due to the company's withdrawal of project payments from the previous year. Net operating cash flow for Q1 was about 14.75 million yuan, an increase of about 67.37 million yuan over the same period last year - 52.62 million yuan, and operating efficiency improved. The company currently holds about 420 million dollars in monetary capital, has plenty of cash on hand, and has little financial risk. I am optimistic about the development prospects of the company's logistics informatization business, and give it a “buy” rating. We forecast that the company's EPS from 2015 to 2017 will be 0.28 yuan, 0.34 yuan, and 0.42 yuan, respectively, and the average annual compound growth rate for the next three years will be 29.4%. The company is in a leading position in the field of highway and port shipping informatization. We are optimistic about the development prospects of logistics informatization and the company's competitive advantages. The company's current stock price is 21.60 yuan, corresponding to a price-earnings ratio of about 77 times in 2015. We gave the company a “buy” rating. The target price for 6 months is 25.20 yuan, corresponding to a price-earnings ratio of about 90 times in 2015. Major uncertainties: uncertainty about the development of new business; risk of market competition; risk of significant cost increases.