It is expected that the company's traditional domestic business will maintain steady development, and that overseas business will continue to grow rapidly in the medium term. Looking at the medium term, the company's compound profit growth rate is expected to remain at 35%, and the long-term investment value is clear. Matters: On March 22, 2019, the company released its 2018 annual report. During the reporting period, the company achieved operating income of 952 million yuan, an increase of 114.78% over the previous year; realized net profit of 117 million yuan, an increase of 139% over the previous year; and realized net profit after deducting 105 million yuan, an increase of 170.88% over the previous year. Domestic business accelerated recovery, overseas business exploded, and consolidated revenue and profit growth slightly exceeded expectations. In 2018, the company's domestic smart mobile terminal business and overseas payment terminal business achieved explosive growth. The domestic business achieved revenue of 725 million yuan, an increase of 84% over the previous year; the overseas business achieved revenue of 227 million yuan, an increase of 361.33% over the previous year. The company's consolidated gross margin was 33%, a slight decrease of 3.26 percentage points from the previous year; under the explosion of revenue, sales expenses increased by only 64.19%. The profit growth rate significantly outperformed the revenue growth rate, and the overall performance slightly exceeded market expectations. New logistics and new retail drive the growth of domestic mobile terminal business, focusing on the continuous growth of high-end customer service. In 2018, the country's online retail sales exceeded 9 trillion yuan, an increase of 25.4% over the previous year; the national express delivery business reached 50.5 billion units, an increase of 25.8% over the previous year. In anticipation of the continuous informatization transformation and upgrading of downstream customers, the company's smart terminal business is expected to maintain steady growth in the medium term. Judging from the R&D bureau, the company invested 72 million yuan in R&D during the reporting period, an increase of nearly 30% over the previous year; out of the 21 R&D projects invested, 10 focused on logistics scenarios, and nearly half involved on-site services for production operations, with clear technical barriers. Judging from the company's customer service, in the logistics field and payment field, it has basically achieved service coverage for all mainstream logistics companies and large commercial banks. Domestic business growth expectations are stable, and the commercialization rate continues to increase. Go overseas with technology and focus on the dividends of overseas mobile payment applications. During the reporting period, the company achieved explosive growth in sales in overseas markets, up 361.33% over the same period last year. The main sales markets were concentrated in India, Southeast Asia, Europe, Russia and South America. Among them, we judge the Indian market as the main growth point. Looking at the medium term, compared to overseas companies, the company has comparable technical advantages and commercialization experience in mobile payment and credit card payment scenarios, hardware, payment application environments, and payment clearing systems. As the company achieves full-scale sales of payment hardware in the Indian market, the company's development of new markets in Southeast Asia is expected to accelerate further. Looking at overseas business revenue in the medium term? It is expected to achieve rapid growth of 75%-100%. Risk factors: risk of overseas market expansion; risk of falling prices and gross margin of smart mobile terminal products; risk of loss of technical personnel; risk of changes in preferential tax policies affecting company performance; M&A progress falls short of expectations. Investment advice: The company's traditional domestic business side is expected to maintain steady development, and overseas business will continue to grow rapidly in the medium term. We raised the company's profit forecast for 2019-2020 to 0.68/0.87 yuan (original forecast: 0.62/0.80 yuan), and added the 2021 profit forecast to 1.11 yuan, corresponding PE to 33/26/20X. If potential mergers and acquisitions progress are taken into account, the diluted EPS forecast for exam preparation is 0.82/1.05/1.31 yuan, corresponding to PE 27/22/17X, maintaining the “increased holdings” rating.