Event description Oriental Communications published its 2015 annual report. The report shows that the company achieved operating income of 3,566 billion yuan in 2015, a year-on-year decrease of 3.92%; and realized net profit attributable to shareholders of listed companies of 170 million yuan, a year-on-year decrease of 5.38%. The basic earnings per share was $0.135. Incident review The core business continued to grow, and net profit increased markedly after deduction: the company's operating income declined slightly in 2015, but the company's two core businesses: communications electronics business and financial electronics business, both maintained a good growth trend. Specifically, benefiting from the increase in private network business order revenue and the trend of domestic production substitution in the financial electronics industry, the revenue of communication electronics business and financial electronics business increased by 12.31% and 4.14% year on year, respectively. In terms of net profit, although the company's net profit declined throughout the year, driven by the dual factors of a slight increase in gross margin and a decrease in the expense ratio, its net profit after deduction increased 29% year on year, and the profit level continued to rise. Considering the rising prosperity of the cluster private network industry and the financial electronics industry, we judge that the company's two core businesses will maintain a good momentum of development. Benefiting from the trend of domestic production substitution, the financial electronic business continues to grow: Looking ahead, we believe that the company's financial electronic business, as its main source of revenue and profit, will continue to grow rapidly over a long period of time. Specifically, there is still huge room for development in the financial electronics industry. Currently, the number of ATMs owned per capita in China is still far below the level of developed countries abroad; 2. The trend of localizing and substituting financial equipment is clear, providing a more relaxed market environment for local Chinese manufacturers; among them, deposit/withdrawal machines still make extensive use of foreign products, and domestic alternatives will provide significant market space; 3. The company not only has advantageous customer resources such as ICBC, Post, and Everbright, but is also actively opening up new customer markets to ensure the continuous expansion of its business scale. We believe that the company has a leading edge in the field of financial electronics, will benefit from industry development for a long time, and support the company's continuous growth in revenue and profit. The demand for cluster private network construction is huge, providing an impetus for accelerated growth: it can be seen that the company, as a leading enterprise in the cluster private network industry, will be the first to benefit from the rapid growth in market demand. Specifically: 1. The acceleration of rail transit construction across the country has become an excellent opportunity for the company to expand the TETRA product line; 2. There is an urgent need for a digital upgrade of private networks in police clusters in various provinces and cities, driving the PDT private network market into a boom stage; 3. Private network users are gradually showing demand for next-generation private network cluster products, and the company will continue to leverage its technical advantages in the field of private networks and public networks by adopting a broadband integration technology approach. We believe that in the face of huge market demand, the company's cluster private network business has high growth elasticity and will provide a strong impetus for the accelerated growth of the company's performance. Investment advice: We are optimistic about the company's development prospects. We expect the company's EPS for 2016-2018 to be 0.19 yuan, 0.24 yuan, and 0.29 yuan respectively, giving the company a “buy” rating.