Event: On April 27, 2016, the company released its 2015 annual report and 2016 first quarter report. In 2015, the company achieved operating income of 252 million yuan, an increase of 24.15% over the previous year, and net profit attributable to shareholders of listed companies was 42.57 million yuan, an increase of 1.53% over the previous year. In the first quarter of 2016, the company achieved operating income of 58.64 million yuan, up 49.23% year on year, and net profit attributable to shareholders of listed companies was 16.78 million yuan, up 25.01% year on year. After deducting non-recurring profit and loss, net profit attributable to listed companies. Comment on net profit attributable to listed companies: The strengthening of sales results was obvious, and the first quarter of 2016 had a good start. The company achieved relatively rapid growth in revenue in 2015 and the first quarter of 2016, indicating that the company has achieved obvious results in strengthening sales team building and further expanding the industry line. The company is developing from a single security to a field combining security and mobile Internet. It is worth noting that operating income for the first quarter of 2016 grew rapidly when the execution of large orders in the previous period was completed, and net profit attributable to shareholders of listed companies grew relatively rapidly when software tax rebates were drastically reduced and expenses increased, indicating that the company's main business progressed well and profitability improved markedly. Front-end product sales are growing rapidly. By product, sales revenue for front-end products in 2015 was 53.11 million yuan, up 51.68% year on year; back-end product sales revenue was 107 million yuan, but this was a decrease of 13.84% compared with the same period last year. The sales situation of the company's front-end and back-end products is basically the same as the market demand for security products. Furthermore, the order signed by the company in 2014 with Beijing Zhonghuineng contributed a large amount of sales revenue in 2015, and the contract had already been executed by the end of 2015. It is worth paying attention to what kind of new products or new business revenue the company used to make up this revenue gap in 2016. The decline in gross margin and the increase in sales expenses are expected to gradually improve. The company's consolidated gross margin in 2015 was 56.04%, showing a continuous downward trend compared with the previous two years. Meanwhile, in 2015, sales expenses increased 62.48% year on year due to the company's increased sales investment. Due to the continuous decline in gross margin and the increase in sales expenses, the company's profit cannot grow at the same time as operating income. In the future, as the sales team is established and the scale of product sales expands, the growth rate of sales expenses will slow down, and gross margin will stabilize or rise slightly. Profit forecast and rating: We expect the company's EPS for 2016-2018 to be 0.24 yuan, 0.32 yuan, and 0.39 yuan respectively. The 2016-2018 PE corresponding to the latest stock price will be 64, 48, and 39 times, respectively, maintaining the “increase in holdings” rating. Risk factors: declining gross margin, slow progress in the expressway WiFi business.