The company released its 2018 annual report, achieving operating income of 765 million yuan, an increase of 34.31% over the previous year, and net profit of 140 million yuan, an increase of 26.12% over the previous year. Operations have remained stable, and revenue contributions to smart justice and public safety have begun to show. In 2018, the company's financial IoT, smart justice, and public safety businesses contributed 48,15878 million yuan, 68.5827 million yuan, and 137.732 million yuan in revenue respectively. Smart justice and public safety accounted for 27% of revenue, and the contribution of new businesses increased. The company's gross margin in 2018 was 46.46%, down 2.61 percentage points from the same period last year; net profit margin was 20.66%, which is basically the same as the same period last year. Community correctional services have outstanding competitiveness. The company provides customers with products and services in the field of smart justice in the three directions of prison, community correction, and drug rehabilitation. For community corrections, it mainly provides community corrections systems using the “UWB wristband+smart terminal” separable management model, community corrections management platforms, apps, and cross-departmental big data case handling platforms using the “one cloud, two platforms” design architecture. Technologies and products such as ultra-wideband UWB high-precision positioning technology, electronic fence technology, ultra-long battery life technology, location trajectory big data analysis, and smart prison big data solutions have leading advantages. Investment advice: We are optimistic about the company's future development in the Internet of Things and the smart industry. The EPS for 19-20 is expected to be 0.44 yuan and 0.56 yuan respectively, maintaining the buy-A investment rating, and the target price for 6 months is 21.00 yuan. Risk warning: Competition in the financial security industry is increasing; business growth falls short of expectations.