The company continued its rapid growth trend in the first quarter of '19, dispelling market concerns about the sustainability of growth. The company's trusted identity technology has already blossomed in many markets in various fields such as finance, social security, public security, and overseas. It is expected that this year's gross margin will increase, further enhance profitability, and continue to be highly recommended. Incident: The company released the 2019 quarterly report forecast. It expects net profit of 9 to 10 million yuan, turning a loss into a profit over last year, and non-recurring profit and loss of about 1.5 million yuan; revenue is expected to increase by more than 60% year on year. Revenue continues to grow at a high rate, and trustworthy identity technology has blossomed a lot. The company's revenue grew rapidly in 2018. Many investors may believe that bus aggregation payments contributed greatly and are worried about the sustainability of growth. In fact, Xiongdi has made substantial breakthroughs in the fields of smart livelihood policing, digital identity applications, and online license management around trusted identity technology, and continued its rapid growth trend in the first quarter of this year. We believe that our understanding of the company should not be limited to the business space of past ID cards, but should take into account the application requirements of the key information of trusted identity in the Internet of Things in an increasingly broad range of scenarios. Public security and foreign affairs, transportation and aviation, social security finance, overseas, etc. are new scenario markets that the company has already opened up. In the future, with the gradual spread of digital identity, the demand for more application management will continue to increase. Furthermore, the company attaches importance to the expansion of overseas markets, and overseas business has been and will continue to be an important engine for performance growth. Gross margin is expected to pick up, strengthening profitability. In 2018, the company cooperated with Internet giants to actively expand the bus payment market. Based on strategic considerations such as market share and subsequent application scenario cards, the gross margin of the intelligent transportation business was ceded. We believe that this year, as the business structure changes and adjustments, the gross margin will rise rapidly. On the one hand, the financial, public security, and several fast-growing overseas markets have relatively high gross margins; on the other hand, the intelligent transportation business will also get through the early stages of payment equipment installation and gradually advance into the operating platform software business. The recovery in gross margin will also be a further guarantee for the company's increased profitability. Investment advice: “Highly recommended - A” investment rating. The company's traditional licensing market is facing new business opportunities, and the expansion of new industry applications has advanced beyond expectations. The company's EPS for 18-20 is expected to be 0.80/1.06/1.51 yuan, and the current price is 38/29/20 times PE. The “small but beautiful” target of high growth and undervaluation has maintained a “Highly Recommended - A” rating. Risk warning: There is a risk that gross margin will decline due to intense market competition; giant cooperation and overseas failure to meet expectations.