Key investment points: Feitian honestly develops, produces and sells information security products with identity authentication as the core. Its products include USBkeys, OTP dynamic tokens, software encryption locks, smart cards, and readers. The company's main revenue and profits come from USBKey, and revenue from this business accounted for 87% of total revenue in 2013. USBKey is an information security product based on identity authentication. Since it was widely adopted by banks, it has experienced a transformation from a generation one product to a second generation product. Product upgrades help manufacturers maintain average unit prices. The manufacturer has proposed the concept of a third-generation USBKey, and in the future, USBKey will integrate the functions of payment terminals. Net profit grew rapidly in the first half of 2014. According to the performance forecast issued by the company, net profit for the first half of 2014 increased by 57-71% year on year. Kookmin Technology is the core supplier of Feitian Chengxin's USBKey security master control chip. In the first quarter of 2014, its USBKey chip shipments increased 33% year-on-year. From this, we infer that in 2014, Feitian Chengxin's USBKey sales increased 37%. According to research by the IC Card Professional Committee of the China Information Industry Chamber of Commerce, the average annual sales volume of USBKey in China will increase by about 20% over the next two years. We expect Feitian Honesty's market share to continue to increase, and product prices will not drop rapidly. The company is also developing and promoting terminal products suitable for mobile payments. Smart card readers are an important driving force for growth. The unit margin of USBKey and OTP dynamic password tokens is stable, about 10 yuan and 6 yuan each, respectively. In 2014-2016, Feitian Chengxin's revenue is estimated to be 11.5 billion yuan, 15.4 billion yuan and 1.97 billion yuan, net profit of 290 million yuan, 4.0 million yuan and 550 million yuan respectively, and earnings per share of 3.02, 4.18 and 5.75 yuan respectively. The initial rating was “increased holdings.” The median price-earnings ratio in 2014 for companies listed after January 1, 2012 in the computer application industry was 45.8 times. Using this as a basis for calculating Feitian Honesty's target price within 3 months, we obtained a short-term target price of 140 yuan.