Event: The company recently released its 2015 annual report. It achieved annual revenue of 1.13 billion yuan, an increase of 16.7% over the previous year; net profit of the mother was 81.95 million yuan, an increase of 30.2% over the previous year. The basic earnings per share was $0.19. The increase in performance comes from an increase in revenue and an increase in the gross profit of the financial electronic business. 1) More than half of the company's annual revenue came from financial electronic business (accounting for 65% of total revenue), an increase of 22.5% over the same period in 2014; 2) the company's overall gross margin increased 2.1 percentage points from 2014 to 31.2%, mainly because the gross margin of the financial electronic business, which accounts for the highest revenue, increased 3.5% compared to 2014; 3) the company's three-year rate in 2015 was basically the same as in 2014, and net profit growth was faster than the increase in overall gross margin. The financial electronics sector has obvious advantages, and payment products have ushered in the expansion of payment products. In 2015, the company's self-service terminal products achieved a breakthrough in the field of bank customers. The company's VTS product won the bid in the agricultural bank system, becoming one of the main suppliers of agricultural bank's next-generation self-service banking super counter products. At the same time, sales of this business expanded in the tax, lottery, public security, cinema, electricity and other industries. In 2015, the company's self-service terminal product sales revenue reached 340 million yuan, an increase of 14.4% over the previous year. At the same time, the company's payment products business has benefited significantly from the development of the industry. The credit card fee reform policy recently introduced by the country (reducing credit card fees and significantly increasing people's enthusiasm for credit card consumption) has promoted a rapid rise in popularity in the third-party payment industry. In a favorable environment, the company's payment products have achieved significant expansion. In 2015, the revenue of payment products reached 230 million yuan, an increase of 64.4% over the previous year. It is estimated that the business still has a lot of room for growth in the next two years. Outreach activities continue to actively expand IDC's business. The company achieved a breakthrough in IDC's business layout through the acquisition of 70% of Yunshuo Technology's shares in 2015. The latter's main asset is the Internet Data Center (IDC), which is expected to contribute a total of 24-360 million yuan in net profit over the next three years. At the same time, the company completed a capital increase to hold Hongda Communications, further strengthen its layout in the IDC basic services field, and has the business capability to provide IDC value-added services. Keep up with industry trends and forward-looking layout in the field of community O2O financial services. The company's acquisition of 51% of the shares of Zentong Network will include it in the scope of wholly-owned subsidiaries. The main purpose is to expand the community O2O financial service business; in October 2015, the company invested in the establishment of Sichuan Shuxinyi through Zentong Network, and cooperated with the Sichuan Agricultural Credit Cooperative to carry out the operation and promotion of community O2O platforms in various cities in Sichuan Province. By the end of 2015, Sichuan Shuxinyi had completed the implementation of six joint venture development pilot projects in Sichuan Province: Guangyuan, Lizhou, Jiangyang, Leshan Sanjiang, Neijiang, Weiyuan, Nanchong, Langzhong, and Guang'an. Currently, the company's community O2O financial services business is still in the early stages of expansion. Considering that the development of financial services towards community is the general trend, the forward-looking layout will bring significant first-mover advantages to the company. Profit forecast. We forecast that the company's 2016-2018 EPS will be 0.73 yuan, 1.00 yuan, and 1.13 yuan respectively. Referring to the average valuation of the financial electronics sector, we gave Securities and Communications Electronics 40 times PE in 2016, with a reasonable stock price of 29.2 yuan, maintaining an increase in holdings rating. Risk warning: There is a risk of a sharp decline in orders.