Q3 revenue grew rapidly. In the first three quarters, the company's 2018Q3 revenue was 129 million yuan, an increase of 44.39% over the same period last year, and its net profit was 28.82 million yuan, an increase of 6.15%. The revenue in the first three quarters of 2018 was 339 million yuan, an increase of 4.64% over the same period last year, and the net profit was 86.51 million yuan, an increase of 1.25% over the same period last year. Overall, the performance was basically the same as the same period last year, slightly lower than we had expected. From the perspective of national defense security, strategic requirements and naval equipment development, we believe that our navy will continue to maintain high investment in construction in the future. With the landing of the military-civilian integration policy, the company's future military performance is expected to rise. In the field of civil ships, the company is also more competitive than domestic enterprises, and is expected to benefit from the continuous promotion of the independent policy of supporting civil ships in the future. We estimate that the EPS of the company from 2018 to 2020 will be 0.62 Universe 0.76 Plus 1.07 Yuan. Maintain a "buy" rating.

Warship supporting business is expected to continue to rise in the future, and civil products business is actively transforming to the direction of system integration, taking into account the multiple needs of the future development of naval equipment, the construction of aircraft carrier formation, and the replacement of old warships in service, we believe that the momentum of high-speed and high-quality development of the Navy will continue for three to five years, and investment in naval equipment construction is expected to remain high. Warship electrical and automation system supporting industry barriers are high, the company is the core supplier of naval ship electrical and automation systems, and is expected to benefit from the continued high investment in naval equipment construction in the future. In the field of civil ships, the company is actively promoting new system-level products and transforming to system integration, which is expected to enhance the company's core competitiveness in the future.

The first incentive target stock award is completed, and the enthusiasm of the core team is expected to be improved. On September 20, 2018, the company completed the first incentive target stock award, awarding 85 employees 8.659 million restricted shares at a price of 12.56 yuan per share. The unlocking performance condition of the equity incentive scheme is based on the net profit in 2018, and the growth rate of net profit excluding share payment fees from 2017 to 2020 is not less than 15%, 25% and 35%, respectively. The equity incentive plan involves a wide range of employees, we believe that the smooth implementation of the equity incentive plan will not only help to enhance the enthusiasm and creativity of the core backbone, but also help to ensure the realization of the company's long-term strategy and business objectives.

Warship electrical and automation high-quality civil service enterprises, maintain "buy" rating companies are high-quality civil service supporting enterprises for warship electrical and automation systems, benefiting from the sustainable development of naval equipment, the policy of civil-military integration and the continuous promotion of the independent policy of supporting civil ships, the performance of both sides of the military and civilian is expected to continue to rise in the future. Taking into account the cost of equity incentive, we estimate that the operating income of Reiter shares from 2018 to 2020 will be 509 million yuan, 667 million yuan, respectively, and the net profit will be 1.04 yuan 1.28 / 180 million yuan, respectively, and the corresponding EPS will be 0.62 yuan, 0.76 yuan and 1.07 yuan, respectively. The average Pamp E valuation of comparable companies in 2018 is 32.29, and we give Reiter shares 32-33 times Pamp E valuation in 2018, with a target price range of 19.74-20.36 yuan per share. Maintain a "buy" rating.

Risk hints: the growth of military expenditure and the promotion of civil-military integration policy are lower than expected; the recovery of civil ships and the promotion of civil ship supporting autonomy policy are lower than expected.