Key investment events: During the reporting period, the company achieved operating income of 5.706 billion yuan, a year-on-year increase of 233 million yuan, a year-on-year increase of 4.26%; total profit of 353 million yuan, an increase of 0.14 million yuan, a year-on-year increase of 4.12%; realized net profit of 313 million yuan, a year-on-year increase of 16 million yuan, an increase of 5.25%; net profit of 276 million yuan, an increase of 3.78% over the same period last year; earnings per share of 0.44 yuan. Affected by the complex upstream and downstream environment, revenue growth in 2018 has temporarily slowed: the company's revenue growth rate in 2018 has slowed. There are three main reasons: 1. Optical fiber demand growth has slowed; 2. Large-scale construction of 5G has not yet begun, orders have declined, and competition among peers has intensified. 3. Affected by the ZTE incident, the growth rate of the subsidiary Tefa Dongzhi has slowed. After the incident is resolved, we expect the company's growth rate to get back on track. Optical communication equipment is the main driving force for growth: the company's technical advantages mainly involve the two major directions of civilian use and military industry: the civilian sector is divided into the fiber-optic cable industry and the intelligent access industry, and the military industry is mainly in the military informatization business. In terms of revenue structure, optical transmission equipment has become the main driving force for growth, and its share of revenue continues to increase. The trend of 5G construction is approaching, and the core business is poised to start: capital expenditure is picking up in 2019, network construction is about to begin, market orders are expected to continue to grow, and the communications industry will usher in the next wave of cyclical development; at the same time, benefiting from the needs of the country's military informatization construction, the rapid pace of military equipment upgrading, and the implementation of military reforms, etc., the market demand for military informatization products is gradually increasing, and the military industry has maintained a certain level of prosperity, providing opportunities for the development of the military informatization industry. Profit forecast and investment rating: We continue to be optimistic about the future development of Tefa Information. We expect revenue in 2019-2021 to be 6.036 billion yuan, 6.530 billion yuan, 7.305 billion yuan, and 7.305 billion yuan, with year-on-year growth rates of 5.8%, 8.2%, and 11.9%; net profit to net profit of 287 million yuan, 318 million yuan, and 368 million yuan, with year-on-year growth rates of 4.0%, 10.9% and 15.7%; corresponding EPS is 0.46 yuan, 0.51 yuan, and 0.59 yuan. The current stock price corresponding to PE is 32/28/25X; it is given a “buy” rating. Risk warning: the easing of trade friction between China and the US falls short of expectations, military reform falls short of expectations, risk of increased industry competition, and operators' capital expenditure falls short of expectations