The company released its first-quarter performance forecast on April 9: It is expected to achieve net profit of 9 million yuan to 10 million yuan in the first quarter of 2019, with a loss of 3,5977 million yuan in the same period last year. Comment: Revenue continued to grow rapidly, and net profit turned a loss into a profit. The main business revenue is expected to exceed 60%, and the growth rate is further increased compared to 2018, driving a significant increase in net profit and reversing losses. Considering that the number of employees in the company increased by nearly 30% in 2018 and the share of revenue in the first quarter was significantly lower, the cost ratio for the first quarter is expected to be significantly higher. Achieving a net profit of nearly 10 million is a good proof of the further increase in profitability and also lays a good foundation for rapid growth in 2019. Deeply involved in the comprehensive management of identity information, many fields have entered a harvest period. The company focuses on trusted identity technology and has upgraded from a smart device manufacturer to a comprehensive identity information service provider. Many fields are in a period of rapid growth. 1) E-passport products have reached the international advanced level, with leading domestic market share, short-term benefits, upgrades, and replacement demand. In the long run, technology updates and increased penetration rates are expected to continue to open up room for growth; the passport management platform is an important extension in this field and is also an industry trend. It has expanded many important customers, from the transition period to a period of rapid growth, and is expected to further strengthen the company's profitability; the demand for trusted identity technology other than e-passports has become more diverse. The company has expanded in various fields based on technology accumulation and business understanding, and continues to deepen in the field of comprehensive identity information management. It is an electronic identity Participants in the core of the chemical era. 2) In the field of smart transportation, payment upgrades are still in a period of rapid release. Products such as operational safety, passenger flow analysis, intelligent scheduling, and connectivity have brought more space. In-depth cooperation with Tencent, Ali, and UnionPay has brought more space. On the one hand, they are promoting the “QuickPass” and “ride code” basic business, and on the other hand, actively expanding value-added business, and on the other hand, the profit model is expected to be further enriched. 3) In addition, the company's smart finance business has a good first-mover advantage, benefiting banks from reducing costs and increasing efficiency, and increasing the trend of intelligence. Related products are expected to enjoy the release of intelligent demand. Smart social security products have entered a period of rapid development. It achieved good results in 2018. The national market space is at the level of 1 billion, and rapid growth is worth looking forward to. 4) Overseas business benefits from more diverse products and customers. Entering a new stage of rapid growth, domestic leaders are expected to become more important global market participants. Investment suggestions: We maintain our forecast that the company's net profit for 2018-2020 will be 108 million yuan, 151 million yuan, and 208 million yuan respectively, corresponding to PE 37 times, 26 times, and 19 times, respectively. Referring to comparable companies, they gave a target PE of 35 times in 2019, corresponding to the target price of 39.08 yuan/share, maintaining a “strong push” rating. Risk warning: Relevant policies are not progressing according to expectations, and changes in the international situation affect overseas business.