Matters: According to the company's announcement on September 5, the China Mobile Procurement and Bidding Network issued the “China Mobile Terminal Company's Own Brand 4G Wireless Landline Manufacturing Service Procurement Project from August 2017 to August 2020 _ Announcement of Selected Candidates”. The company's wholly-owned subsidiary, Shanghai Sanqi Communications Technology Co., Ltd., was the selected supplier for this project, with a project procurement amount of about 163 million yuan. Main opinion 1. The wholly-owned subsidiary won the bid for 163 million major projects, which boosted the company's performance, the company's wholly-owned merger and acquisition subsidiary Sanqi Communications pre-bid for China Mobile's 4G wireless landline with its own brand The project cycle is 3 years, and the estimated procurement volume is 1 million units. The estimated procurement finance is about 163 million yuan, accounting for 17.15% of the company's total audited operating income in 2016 and 125.3% of the revenue of the subsidiary Sanqi Communications in the first half of 2017 of 130 million yuan. Revenue confirmation will greatly boost the company's performance. With its own brand, Sanqi has now won a major order from China Mobile. Brand awareness is expected to increase dramatically, creating a radiation effect that will benefit subsequent operations. 2. Multi-point penetration between wireless terminals and the Internet of Vehicles to achieve effective collaboration in the industrial chain Three Flags Communication is a well-known technology company based on communication, with the Internet of Vehicles as the core. It has a rich product lineup, including various vehicle networking products such as smart rearview mirrors, in-vehicle OBD, and wireless terminal products such as wireless data cards and wireless routers. The company's acquisition of 100% of its shares at a fixed price of 592 million yuan will rely on its technology and product advantages in the Internet of Vehicles and communication modules, consolidate the upstream and midstream capabilities of the entire Internet of Vehicles industry chain, and actively collaborate to expand overseas business. In the first half of the year, the company joined hands with Sanqi to deepen the development of overseas connected car services such as intelligent buses and online car-hailing in the original overseas front-loading business. It is expected that overseas business will continue to advance in the future. 3. Vehicle Internet of Vehicles integrated service provider Xu Xu Qihang. The outlook is that the company is committed to the world's leading provider of “CID System+Internet of Vehicles Software+Hardware and Smart Cockpit Platform” and intelligent integrated solutions, continuously improving the industrial ecosystem through endogenous epitaxial extension. The company's mergers and acquisitions of Sanqi Communications and Inka Technology have vigorously promoted the entire industry chain layout, and the acquisition of Shanghai Hangsheng Industrial has rapidly increased the market share of the front-loading business; the strategic cooperation with Zhongcheng Auto Insurance and the connected UBI application will open up a broad space for UBI insurance; and the strong research and development of intelligent cockpits will actively embrace the vast ocean and blue ocean of driverless driving, and the broad prospects are worth looking forward to. 4. Investment suggestions: It is estimated that in 2017-2019, the company can achieve net profit of 172 million yuan/241 million yuan/314 million yuan, corresponding to PE 42/30/23 times, respectively, and maintain the “recommended” rating. 5. Risk warning: The development of front-loading and Internet of Vehicles business fell short of expectations, and competition in the Internet of Vehicles market intensified.