Guide to this report: Fundamental growth momentum is strong; driving the upgrading of business models in transportation and identity management businesses, overseas markets have exceeded expectations. First coverage, increased rating, target price 39 yuan. Key investment points: initial coverage, increased holdings rating. The company's 18-20 EPS is expected to be 0.79 yuan, 1.09 yuan, and 1.47 yuan, respectively. Refer to the industry average PE, and give a certain premium based on high performance growth. The company was given 36x PE in 2019, corresponding to a target price of 39 yuan, for the first time coverage, and an increase in the rating. Deeply involved in identity management, fundamental growth momentum is strong. The company is a leading domestic integrated identity information service enterprise. It has formed two major business segments: identification, intelligent IoT, and intelligent transportation services, and actively cooperates with Internet giants to accelerate the implementation and promotion of new business forms and business models such as new payment devices and electronic passports. According to the performance report, in 2018, the company will achieve revenue of 600 million yuan, a year-on-year increase of 57.98%, and net profit to mother of 107 million yuan, an increase of 34% over the previous year. The first quarter of '19 is expected to achieve net profit of 9 million yuan — 10 million yuan. Compared with a loss of 3.58 million yuan in the same period last year, it once again verifies that the company's performance growth momentum is sufficient. Innovate intelligent transportation solutions and transform and upgrade to data operators. With the acceleration of intelligent bus transformation and centralized upgrading of bus payment equipment across the country, the company's intelligent transportation business still has a broad market space. In order to strengthen the advantages of card slots in the transportation sector, the company cooperated with Ali and Tencent to promote the implementation of new intelligent transportation solutions around mobile payments, and jointly explore the practical operation of bus face-swiping payments and big data bus travel information, build a new cloud-based product architecture model, and upgrade and evolve the business model in the future. Lay out the digital identity information market and expand overseas beyond expectations. The technical strength and market share of the company's identity management are in a leading position in China. Overseas markets are developing smoothly, and many large orders were concentrated in 2018. As identity management equipment enters a period of centralized upgrading and the number of domestic outbound travelers grows rapidly, demand in the e-passport market has risen markedly. The company is taking advantage of its leading position in the industry to actively lay out emerging digital identity information markets such as e-passports, and the prospects are promising. Risk warning: Technology advancement and implementation are not as good as expected; changes in the international environment affect overseas business.