Key investment events: On April 22, 2014, the company issued an announcement: In 2013, it achieved operating income of 3.43 billion yuan, an increase of 4.21% over the previous year, and realized net profit attributable to shareholders of listed companies of 190 million yuan, an increase of 0.58% over the previous year, and earnings per share of 0.154 yuan. Comment: Performance is generally in line with expectations. Digital clusters are lagging behind and financial electronics are growing rapidly. In 2013, the company achieved operating income of 3.43 billion yuan, an increase of 4.21% over the previous year, and net profit attributable to shareholders of listed companies of 190 million, an increase of 0.58% over the previous year. Growth was weak. The main reason was that the construction of the public security digital cluster private network lagged behind in 2013, causing the company's business revenue to fall 64% year on year. However, the company still actively achieved certain breakthroughs: it won the bid for simulation network upgrade and digitization projects in six prefectures and cities, including Wuhan, Wenzhou, and Hohhot, and was the first commercial plan in the industry to achieve a smooth transition from simulation to PDT. These breakthroughs have laid a solid foundation for the company to share the explosion of public security networks in the future. Furthermore, for the first time, the company's cluster business achieved commercial use in the port, airport, factory and mining industries. The highlight of the company's performance in 2013 was financial electronics: in 2013, sales of the company's financial electronic ATM machines increased 30% year over year, of which sales of independent products increased more than 50% year on year, driving the company's financial electronics business revenue to increase 19% year on year and profit to increase 23% year on year. While maintaining an advantageous share among the original shortlisted banks such as Postal Savings and ICBC, the company actively explores the procurement of ATMs and all-in-one machines from the new banks, and vigorously expands urban commercial banks, opening up space for the long-term sustainable development of the company's business. In terms of inventory, the products issued by the company rose from 170 million in 2012 to 300 million in 2013, a sharp increase of 76%. Most of these were financial electronic products, and a small portion were digital cluster products, reflecting the company's good order situation, laying a solid foundation for the company's performance growth in 14 years. Gross margin is basically stable, and is expected to rise in the future. The cost ratio has declined slightly, and will maintain this trend in the future. In 2013, the company's overall gross profit was 12.55%, down 0.7 percentage points from the previous year, mainly due to structural change factors. By business, gross margin remained stable: the gross profit margin of the communications and electronics business was 9.57%, down 0.52 percentage points from the previous year, mainly due to the stagnation of digital cluster business; the main reason for this was the increase in the proportion of independent products with relatively low gross margin and structural nature As a result of changes. Judging from the cost ratio, in 2013, the company's three expenses rate was 9.61%, down 1.2 percentage points from the previous year. The main reason was that the company strengthened cost control, stabilized R&D investment, and controlled labor costs. We believe that in the future, with the continuous and rapid development of the company's financial electronic business and the launch of a digital cluster business with high gross margin, the company's gross margin is expected to structurally rise, and the expense ratio will maintain the trend of a slight decline. Performance has exploded and increased throughout 2014, and future orders are expected to continue to be implemented. In mid-March, the company won the bid for the Dalian Public Security Private Network project (together with the subway), which amounts to 90 million. It is the first major order since the company officially entered the public security network digital cluster business. It is also the first large-scale order since the end of 2012. It is also the first large-scale order in the public security network digital cluster industry in recent years (since the end of 12). It is significant and marks the beginning of the company's digital cluster business. It is significant and marks the beginning of the company's digital cluster business. Through this project, large-scale supply and implementation experience can be accumulated, which will push the company's digital cluster business to continue to develop rapidly. We believe that the company has TETRA and PDT technology, is backed by China's Putian, and has outstanding resource endowments. It is expected that in the future, digital cluster scale orders will continue to be placed, the sharing industry will explode, and achieve rapid growth. At the same time, in terms of ATM business, this year is a big year of procurement for the Industrial and Commercial Bank, one of the company's main customers, and the company will continue to promote localization of its procurement, and the company will benefit greatly; furthermore, the company is expected to achieve a breakthrough with the Agricultural Bank this year. Furthermore, Silver Star Finance, which was acquired by the company earlier, has expanded the company's financial business product line, which helps the company provide comprehensive financial electronic solutions and promotes the rapid development of the company's financial electronic business. Therefore, we believe that in 14-15, the company will benefit from the explosion of the public security digital cluster industry and the rapid growth of the ATM business to achieve explosive growth in performance. Furthermore, it is worth noting that the company's information consumption security-related business, which has been actively transformed on the basis of the original switching network business, has made a certain breakthrough after 13 years of development. The signaling gateway and media gateway have passed Bell tests and will soon be used on mobile 4G networks. It is expected that in the future, industry applications and information security markets will be fully expanded. It is expected that in 2014 it will break through certain group customers and achieve commercial cases, which will open up new growth space for the company in the field of information consumption security. Profit forecast: Looking at 2014, the company's digital cluster business began to explode, the financial electronic business grew rapidly, and the company's equity incentive exercise conditions required the company's 14-year performance to increase by more than 52% year on year. Therefore, we judge that the company's 14-year performance will explode and increase by more than 60%. Looking at the medium to long term, we are optimistic that the company will benefit from the large-scale construction of the public security network and the construction of financial electronic solutions. The EPS for 14-16 is expected to be: 0.28 yuan, 0.40 yuan, and 0.50 yuan. We continue to pay attention to the implementation of the public security network and reaffirm the “increased holding” rating. Risk warning: Public security network promotion falls short of expectations, industry competition is fierce