Guide to this report: The company's performance for the first three quarters was slightly lower than expected. We expect the company's performance to improve as 5G construction accelerates and the factors compounding military orders are gradually eliminated. Key investment points: Maintain the target price of 36.4 yuan and increase holdings. Affected by factors such as the slowdown in 4G construction and military reform, the company's 17Q3 performance was slightly lower than expected. We expect that with the acceleration of 5G construction and the gradual elimination of factors suppressing military orders, the company's performance in 2018 is expected to improve. We lowered the 2017-18 EPS to 0.48/0.69 yuan (originally 0.56/0.72 yuan). Considering that the company's performance in 2018 is expected to return to a high growth rate, we will maintain the target price of 36.4 yuan, corresponding to 76 times PE in 2017, increasing our holdings. Due to short-term suppression factors, the 17Q3 results were slightly lower than expected. The company achieved revenue of 1.62 billion yuan (+12.5%), net profit of 120 million yuan (-19%), gross profit ratio of 25.4% (-2.3%), and a period expense ratio of 14.4% (+1.2%). We believe that the main reason for the performance was lower than expected: ① 4G construction has slowed since 2017, and 5G construction has not yet started, causing the growth rate of the civilian goods business to slow down; ② Affected by multiple factors, the overall order situation of the military industry in 2017 fell short of expectations. We expect the company's military business to be affected to a certain extent; ③ Financial expenses compared to the same period The increase of 26.63 million yuan was mainly due to exchange losses due to large exchange rate fluctuations in the third quarter. Benefiting from the acceleration of 5G construction and the recovery of the military goods business, the 2018 performance is expected to return to a high growth rate. ① According to the Ministry of Industry and Information Technology, the second phase of 5G testing in China has been successfully completed, and the third phase is about to begin; the 10.25 acquisition of Jiangsu Wanbang was approved by the Bureau of Science and Industry, enhancing its competitiveness in 5G. ② As the impact of military reform is gradually eliminated, we expect the company's military business to pick up in 2018, and the downstream will gradually expand from the aviation and electronics fields with traditional advantages to various fields of sea, land, air, and space. ③ The underwater defense system is progressing smoothly. The core module has been integrated into an “underwater and air integrated information system” to enjoy the 50 billion market in the future. ④ As of 10.10, the company has repurchased 300,000 shares (30% completed). Risk warning: The transformation is less than expected; there is a risk that the development of underwater defense systems falls short of expectations.