Key investment events: The company issued an announcement stating that the company's controlling shareholder Run Datai's concerted activist, Run Liangtai, advocated that all employees actively buy the company's shares and promised to underwrite them. The promise is to underpin an increase in employees' stock holdings, and the controlling shareholders and core executives to continue to increase their holdings, laying confidence for development. According to the announcement, Rundatai promised to complete a net purchase of Nikkai Smart stocks from October 19 to November 19, held continuously for 36 months or more, and continuously performed at Nikkai Intelligence during the holding period, the earnings of such stocks are owned by individual employees. If losses occur, run liangtai will compensate them. The company has carried out risk investigations on Runliangtai and Rundatai. Currently, their own credit conditions are good, and they have the ability to repay funds. Meanwhile, since this year, Runliangtai has increased its holdings of the company by a total of 3,418,400 shares through centralized bidding, accounting for about 1.10% of the company's total share capital, according to the shareholding increase plan announced in August this year. The company's chairman Liu Ping, deputy general manager Wu Yongping, Li Wei, and Deputy General Manager Yuan Shu also plan to increase the company's stock holdings by no less than 600,000 shares (or less than 11 million yuan) within six months. The company's core executives and controlling shareholders have shown confidence in the company's future prospects based on the company's current layout and operating conditions. The company will deeply cultivate the Internet of Things to ensure the continuous, rapid and stable development of the company's performance. Accelerate the integration of the IoT sector, and the IoT business has begun to contribute rapidly to performance. In the first half of 2018, the company's IoT business revenue reached 596 million yuan, accounting for more than 30% of the company's revenue. Among them, Xinxuntong, a wholly-owned subsidiary of the company, introduced strategic investors through a capital increase. Xinxuntong began merging in March this year, with H1 revenue of 280 million yuan. After introducing external strategic investors, it is conducive to strengthening the financial strength of Xinxuntong and enhancing its market competitiveness. Currently, the company has formed a full range of integrated service capabilities through a comprehensive “cloud plus terminal” layout. It can fully provide modules, cloud platform services, cloud computing and system solutions. The performance of the Internet of Things is expected to increase rapidly. Operators' capital expenditure is expected to pick up, and traditional business is developing steadily. In 2018, in the face of a decline in overall operator investment, the company strengthened resource integration in the integrated service business through the acquisition of minority shareholder shares of Nikkai Express and adjustments to the management of Nikkai Express. The total revenue for the first half of this year reached 1,232 billion yuan, and it is estimated that more than half of the contributions from traditional communication technology services will come from traditional communication technology services. As domestic operators' capital expenditure is expected to pick up next year, the company's traditional communication technology business will develop steadily. Profit forecasts and investment advice. It is estimated that the company's 2018-2020 EPS will be 0.66 yuan, 0.97 yuan, and 1.34 yuan, respectively, and PE corresponding to 2018 will be 24x, 16x, and 12x, respectively. We are optimistic about the steady development of the company's traditional business, fully enjoying the dividends of industry development on the IoT circuit, and maintaining the “buy” rating. Risk warning: The company's main business development does not meet expectations, and the IoT market is fiercely competitive.