Weisheng Group (Weisheng)'s performance in 2018 was lower than we expected, but its performance remained solid, as the company found growth momentum despite the reduction in State Grid purchases.

Management stressed that State Grid will adopt new measurement equipment standards, which confirms our view that State Grid will accelerate investment from 2019 to create growth opportunities for equipment manufacturers such as Weisheng.

We speculate that Weisheng will change its plans and will spin off its communications and fluid AMI businesses to Science and Technology Innovation Board.

We remain optimistic about Weisheng's prospects as we believe it will continue to grow, mainly benefiting from a more positive industry boom and a more diversified customer base.

Maintain the "buy" rating with a new target price of HK $5.43, based on 13 times 2019 p / e.