Event: The company released the 2018 semi-annual performance report. In 2018, H1 achieved operating income of 2,399 billion yuan, up 276.98% year on year; net profit attributable to the parent company was 180 million yuan, a sharp increase of 258.87% over the previous year; and basic earnings per share of 0.24 yuan. Comment: Self-organized network order performance was gradually released, supporting high performance growth. Since May 2017, the company has signed a total of 5.2 billion yuan in orders for independent network products. Last year, the confirmed revenue was about 568 million yuan, and the remaining portion will be gradually confirmed in 2018. Self-networking products are currently in a period of market explosion, and can be widely used in military, public safety, emergency dispatch and other fields. We believe that as the company's orders continue to be fulfilled, the company's future performance will be greatly enhanced. Strengthen the layout of the entire production chain of Beidou's high-precision business to seize future market opportunities. In the field of high precision, the company focuses on the industry application market, adopts a business development strategy with a full industry chain layout, strengthens the global resource layout of large-scale markets such as surveying and mapping, precision agriculture, and mechanical control, while also driving the development of core technology and markets for high-precision chips, boards, and antennas in Beidou. We believe that high precision is the future of the development of the navigation industry. It has huge market space. The company's entire industry chain lays out the high-precision application market, which will create potential profit growth points for the company in the future. The “cloud plus end” solution is beginning to bear fruit, and Beidou's mobile Internet business has achieved a major breakthrough. At present, the practical application of the company's public security has formed standards and models in the industry, and is expected to become the company's core profit business in recent years. In 2017, the company signed a 1.16 billion yuan “Xueliang Project” project in Xinjiang. Part of the revenue was confirmed in 2017, and the remaining portion is expected to be confirmed in 2018. With the continuous improvement of the company's mobile terminal product line, the company currently has internationally leading R&D and production capabilities for handheld, in-vehicle mobile terminals and rugged tablet devices, covering dozens of industries such as public safety, electricity, finance, land, and urban management, and has plenty of room for development. Earnings forecasts and ratings. The company's core technical strength has been continuously strengthened, and various businesses have entered a period of explosion. We are firmly optimistic about the company's future development prospects. We expect the company's operating income from 2018 to 2020 to be 4.1 billion yuan, 5.4 billion yuan, and 7.1 billion yuan respectively; net profit attributable to the parent company from 2018 to 2020 is 435 million yuan, 586 million yuan and 772 million yuan respectively; EPS is 0.59 yuan, 0.78 yuan, and 100 million yuan respectively. The PE corresponding to the current stock price is 32 times, 24 times and 18 times, respectively, maintaining the “buy” investment rating. Risk warning: Autonomous network business space is limited, and the progress of Beidou-3 falls short of expectations.