The network optimization business has stabilized, and education, increased communication, and the Internet of Things has been extended many times, creating a dual-main business pattern. The company's traditional business is to provide mobile network optimization services to operators. Currently, 4G construction is coming to an end, demand for network optimization is stabilizing, and the company is seeking to open up new growth points. Through extension, the company has successively acquired Zhixiang Information, One Core Intelligence, and Meidu Education, laid out vocational education, increased communications and IoT services, and entered a stage of parallel development of the two main businesses. Communications IoT sector: Seize IoT development opportunities and rely on core technology to achieve high growth. Faced with traditional business growth bottlenecks, the company chose the Internet of Things as a new strategic direction. The acquisition of One Core Intelligence in 2017 achieved a leapfrog layout of the IoT business. One-core intelligence focuses on product development in the field of RFID. RFID is one of the core technologies of the IoT sensing layer, and is widely used downstream. One-core intelligent technology has been steadily accumulated and its competitive advantages are outstanding. Its three major businesses, industrial robot manufacturing, RFID products, and IoT solutions, form a product line with a clear gradient around RFID technology. Technical barriers, market space, and growth have all increased sequentially. Among them, the IoT solution is a strategic product that integrates its own software and hardware advantages and empowers the IoT industry. The gross margin is high, and the revenue volume has expanded rapidly since 2016, which will strongly promote the improvement of the company's performance. Education sector: Focus on the pain points of academic vocational education to form a branded, large-scale, and replicable school-enterprise cooperative training model. (1) The supply of highly skilled talents in the job market is in short supply, the shortcomings in traditional vocational education skills development are prominent, and the imbalance between supply and demand is difficult to solve. Introducing industrial resources and improving the effectiveness of practical training through the integration of industry and education is the key to optimizing the supply of talents. (2) The company's education layout focuses on the pain points of colleges and universities, and builds its own brand “Dingli College” based on school-enterprise co-construction and enterprise-led training models. Dingli College has the advantages of practical training and teaching, a team of two teachers, and a curriculum system that meets industry standards. It meets the needs of schools, students, and enterprises, and gradually forms a brand effect, scale advantage and replicability through steady expansion. At present, the company has cooperated with 15 Dingli University projects, and has initially achieved large-scale development in advantageous regions such as southwest China and Jilin. (3) On the basis of the mature operation of Dingli University, the company introduced advanced vocational education resources from Germany, created a high-ranking and high-fee “Sino-German University” brand project, comprehensively upgraded the curriculum system and training model, and delivered qualified talents to the high-end manufacturing industry. In addition, the company's acquisition of Shanghai Meidu Education, an established vocational education institution, increased financial training, helping the school-enterprise cooperation model enter a new stage of broader and more depth. Investment suggestion: The company's communication, Internet of Things+education are working in the same direction, and 2018 will enter a period of performance release. In the communications IoT sector, in the context of the stabilizing network optimization business, the acquisition of a core of intelligence has added another impetus for growth. One-core intelligence has accumulated RFID core technology, and the new IoT solution business is in line with industry demand trends. It has large market space and high gross margin, and is currently in a period of rapid revenue growth. In the education sector, the school-enterprise co-construction model of Dingli College is in line with the demands of change in colleges and universities, and there is strong demand for employment in enterprises with advantageous majors such as ICT and automotive engineering. At present, Dingli College has branding, scale, and replicability. Joining Meidu will form a competitive synergy, and the pace of expansion is expected to accelerate in the future. Looking at the short term, the new colleges established in 2016-17 are still expanding enrollment this year, and the revenue from service fees is expected to be reduced. We expect the company's 2017-2019 net profit of 1.74/2.46/340 million yuan and EPS of 0.31/0.44/0.61 yuan, corresponding to the latest PE price of 25, 18, and 13 times. It has a valuation advantage. Considering its performance growth, we will give it a target PE 25 times for 2018, a target price of 10.95 yuan, and a “buy-A” rating. Risk warning: The network optimization business market is shrinking, Dingli University's enrollment falls short of expectations, and the expansion of cooperation between colleges and universities is weak.