Matters: On August 17, 2018, the company announced its 2018 semi-annual performance report. It achieved operating income of 2,408 billion yuan and net profit of 180 million yuan during the reporting period. Our comments on this are as follows: Revenue continued to grow rapidly, and performance exceeded expectations. In the first half of 2018, the company achieved operating income of 2,408 billion yuan (YoY +278.34%) and net profit of 180 million yuan (YoY +258.40%). Overall performance increased beyond expectations. The reasons for the rapid growth of the company's performance during the reporting period include: (1) In 2018, the self-organized networking business signed a total of 2.5 billion yuan in contracts. There were sufficient orders in hand, and performance was gradually released. (2) The high-precision business has achieved rapid growth, and the traditional surveying and mapping business continues to gain strength, relying on leading product technology capabilities to expand emerging application markets. Furthermore, the company has better control over sales expenses and management expenses, while financial expenses have increased significantly due to increased loans. Surveying and mapping products have great potential, and high-precision business has entered a period of explosion. According to the “2018 White Paper on the Development of China's Satellite Navigation and Location Service Industry” published by the China Satellite Navigation Association, the market size of the high-precision industry reached 6.3 billion yuan in 2017, with a compound growth rate of more than 20% over the past five years. In terms of high-precision business, through a series of horizontal mergers and acquisitions, the company opens up upstream and downstream industrial chains and expands application markets in various industries such as surveying and mapping, precision agriculture, and machinery control. The company has built strong product core competitiveness through the entire industry chain layout. Since 2018, the company's surveying and mapping product line has achieved significant performance growth, with revenue increasing by 61.67% year-on-year, with high-precision GNSS receiver shipments exceeding 23,000 units. In addition, the company also launched the latest RTK receiver, laying the foundation for further market share capture. With the rapid development of the industry, high-precision business is expected to continue to explode. Self-networking business orders are continuously signed, and sufficient on-hand orders have led to continued high growth in business revenue. As the impact of military reform gradually weakens, the pace of military informatization construction accelerated during the “13th Five-Year Plan” period. At the same time, the Beidou-3 construction cycle began, and the military's self-organizing network business is expected to usher in a period of rapid growth. In 2017, the company received more than 2 billion yuan of military self-organized network product orders, achieved a new order of 2.8 billion yuan in 2018, and confirmed revenue of 1.62 billion yuan in the first half of the year. Since self-organized network orders confirm revenue according to project progress, the business has a foundation for continuous growth. In terms of self-networking business, the company has rich practical experience and excellent customer resources, and is expected to expand into fields such as public safety and emergency command in the future. Strengthen the Beidou mobile layout and strengthen the ability to apply spatial and temporal information. In the Beidou mobile Internet business, the company continues to improve its terminal product line, strengthen applications in advantageous industries such as public security and aviation, and actively expand intelligent transportation and smart cities. Currently, it has received more than 20 million yuan of smart transportation software orders; in terms of space-time information services, the company is strengthening the application and expansion of “China's location” and “Chinese accuracy”. “China Precision” is the fourth commercial space-based enhancement system in the world. It can provide centimeter-level positioning accuracy globally, which will significantly improve product accuracy and provide a solid foundation for the development of high-precision business. Risk factors: repayment of self-organized network orders falls short of expectations, competition for high-precision products is intensifying, financial expenses are rising too fast, etc. Earnings forecasts and investment ratings. As the construction of the Beidou-3 system progresses steadily, the company, as a leading enterprise in high-precision navigation and positioning applications in Beidou, is expected to maintain high growth in high-precision surveying, surveying, and self-networking services. Since the company's business development in the first half of the year greatly exceeded expectations, we raised the company's 2018/19/20 EPS forecast to 0.59/0.88/1.19 yuan (original forecast 0.54/0.74/0.98 yuan), corresponding to PE29/19/14 times, maintaining the “buy” rating.