Investment highlights: The company's third-quarter performance continued its high year-on-year growth trend. The company released its third quarter results announcement on October 30, stating that net profit attributable to owners of the parent company for the first three quarters was 103 million yuan, an increase of 46.40% over the same period last year; operating income was 2,681 billion yuan, up 48.58% from the same period last year; and basic earnings per share was 0.33 yuan, up 43.48% from the same period last year. The company's net profit for the third quarter attributable to owners of the parent company was 53.9941 million yuan, up 29.35% from the same period last year; operating income was 853 million yuan, up 8.28% from the same period last year; and basic earnings per share was 0.17 yuan, up 30.77% from the same period last year. The target of mergers and acquisitions is to increase the company's revenue scale, and the month-on-month growth rate of net profit has slowed since this year. Since this year, the company has adhered to the Internet of Things as the company's development direction and actively carried out IoT business expansion. In addition, the company's operating income and costs increased dramatically in the third quarter. However, the company's gross margin has returned to over 20%, mainly due to an increase in the share of equipment products. In the future, as operator orders are placed, gross margin is expected to continue to increase. In terms of expenses, the company's sales expenses were normal in the third quarter, the same month-on-month and year-on-year; in the third quarter, the company listed R&D expenses separately, but from an overall perspective, management expenses increased dramatically. On the one hand, it was also the company's expenses for expanding IoT business and increasing R&D expenses for IoT cloud platforms and related innovative products; financial expenses increased sharply year on year, mainly due to increased bank loans due to the acquisition of business, leading to a sharp increase in interest expenses. In terms of cash flow, the company's net operating cash flow declined sharply this quarter, mainly due to significant business growth in holding subsidiaries and an increase in daily operating capital. At the same time, repayments from the company's general service business were generally at the end of the year, so net cash flow outflowed a lot at the end of the period. In summary, the company's revenue and profit for the third quarter are still on the rise. Gross margin has rebounded, and the cost growth rate is higher than revenue. Subsequent performance breakthroughs await a breakthrough in the IoT business. Set up terminal subsidiaries to accelerate the layout of the IoT industry chain. Driven by policies to support the development of the Internet of Things, operators' NB-IoT network coverage has been continuously improved, and related subsidies have gradually been implemented. At the same time, driven by technologies such as big data, cloud computing, and artificial intelligence, the shipment of smart terminal devices in the consumer market has greatly increased this year. As a collector of IoT terminal data, these smart products and devices are also one of the important entrances to the Internet of Things, which can continuously enhance the experience of IoT users and promote the development of IoT applications. Applications in related application fields, such as smart cities, smart homes, and the Internet of Vehicles, etc., are gradually maturing. The terminal subsidiary specially established by the company seizes market opportunities. By deeply integrating leading cloud platform technology on the cloud side with years of module R&D accumulation on the end side, and through the company's nationwide operator sales network and agent sales channels, the company's nationwide operator sales network and agent sales channels, it vigorously expands the IoT smart terminal equipment business and improves the product layout of the company's comprehensive IoT solutions. Executives actively increased their holdings to highlight the company's good future development prospects. Recently, the company's controlling shareholder, Yun Liangtai, encouraged employees to buy company shares, and promised to provide underwriting compensation for purchasing company shares during this period on the basis of more than three years of continuous holding. Meanwhile, since this year, Runliangtai has increased its holdings of the company by a total of 3,418,400 shares in the secondary market, accounting for about 1.10% of the company's total share capital. 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 majority shareholders and management of the company are optimistic about the current favorable development trend of the IoT industry, the company's stable operating conditions, and the rapid growth prospects of the company in the future and make the above decisions. Therefore, we believe that the company will continue to expand in depth in the IoT industry. From upstream modules to downstream applications, it will be the company's field of strength, thus ensuring the company's continuous performance and stable and rapid development. The profit forecast takes into account that the IoT industry will enter a period of rapid growth, and the company's pre-arranged business will grow rapidly. On the one hand, the company's performance is guaranteed by the communication service business, which provides a stable guarantee. On the other hand, the addition of merger of Xinxuntong and Longshang Technology, as well as IoT solutions such as smart cities, smart transportation, and smart agriculture, will bring profit in the fourth quarter. The company's main business revenue is estimated to be 5.023 billion yuan, 6.831 billion yuan and 9.017 billion yuan respectively in 2018-2020, and the corresponding net profit is 188 million yuan, 380 million yuan and 584 million yuan respectively, giving the company a “buy” rating. Risk warning: The development of the IoT industry falls short of expectations; the gross margin of modules and terminal products continues to decline; and platform business expansion falls short of expectations.