Event: The company announced its 2015 three-quarter report, with revenue of 318 million yuan, a year-on-year decrease of 1.74%, net profit of 13 million yuan, a year-on-year decrease of -835.82%. The volume and price pressure on the corporate finance IC card business is dragging down the company's performance. Currently, financial IC cards account for about 75% of the company's total revenue and are the most important source of revenue for the company. As the penetration rate of financial IC cards in newly developed bank cards reaches 100% and the number of new market entrants increases, corporate finance IC card shipments have slowed, unit prices have declined by about 20% since the beginning of the year, and overall gross margin has declined. We expect to ship about 150 million corporate finance IC cards in 2015. The devaluation of the renminbi caused exchange losses, and the company's financial expenses increased sharply in the third quarter. The company's upstream procurement involves a large number of overseas orders (mainly financial IC card chips), so it holds a lot of US dollar debt. Affected by the depreciation of the RMB since June, the company has experienced significant exchange losses. In the third quarter, the company's financial expenses rose sharply to 19.32 million yuan (up 285% year on year), which is an important reason for the decline in performance in a single quarter. The volume of shipments under tax control has increased steadily, relieving the pressure on the company's performance. As some regional life service industries are included in the scope of business reform and new demand brought about by the implementation of value-added tax invoicing system upgrades, demand in the tax control market surged in 2015. In the future, as more regional services, construction, real estate, and financial insurance industries are included in the scope of “business reform and growth,” the tax control market is expected to maintain relatively rapid growth in the next 2 years. We expect the company to ship about 400,000 tax control panels in 2015. Businesses such as Education Cloud, TEE, and mPOS lead innovation and drive the company's transformation from products to services. (1) While improving the profitability of the original smart card business, the company is promoting the transformation of the overall business from a “product” to a “service”. The company's current strategy is for the smart card business to continue to transfuse blood into innovative businesses such as education cloud, O2O smart retail, and TEE, etc., and it is expected that the business structure will gradually be optimized in the future; (2) the next 2 years will be a key window period for the bidding construction of education cloud platforms in various regions. The company has technology, resources, brands, and market advantages, and is the absolute leader in this market; (3) mPOS has met the rigid needs of small and micro merchants for payment, portability, and intelligent management. At the same time, the data services based on merchants will be a larger market, so I am optimistic about the company's expansion in this field; (4) the company's recent market The announcement is cooperating with Qualcomm on TEE technology. Mobile payment security is a vast blue ocean market, and we are optimistic about the company's layout in this field. Give it an “Overweight” rating. We expect Tianyu Information's 2015-2017 sales revenue to be 14.49/18.48/2.171 billion yuan, corresponding net profit of 0.37/1.22/193 billion yuan, and corresponding EPS of 0.09/0.28/0.45 yuan, respectively. Considering the slowdown in the growth rate of the company's main financial IC card market, the company was given a target price of 23.8 yuan for 12 months, corresponding to 85 times PE in 2016, and given a “increase in holdings” rating. Risk factors: further decline in financial IC card shipments and unit prices; systemic risk.