The performance of the first quarter report increased rapidly. The increase in the contribution of the public safety business in Q1 of 2019 achieved revenue of 147 million yuan (+14.8%), net profit of 103.389 million yuan (+63.28%), net profit of 10.3389 million yuan (+63.28%), and net profit of 7.2602 million yuan (+42.02%) after deducting net profit of 7.2602 million yuan (+42.02%). The company's performance has maintained relatively rapid growth, is in the middle of the performance forecast range, and profits are growing rapidly. During the reporting period, the company's main business continued to grow steadily, and public safety business revenue increased compared to the same period last year, leading to an increase in net profit during the reporting period. Gross margin increased steadily, and the three expense ratios increased slightly. The gross profit margin of sales in 2018 was 40.87%, up 1.92pp from the previous year, and the gross margin of business continued to increase. The sales expense ratio is 12.71% (-0.49pp), the management fee rate is 22.49% (+1.75pp), and the financial expense ratio is -0.20% (-0.08pp). The total cost rate for the three categories was 35.00%, up 1.18pp from the previous year. Management expenses increased by 7.1058 million yuan over the same period last year, mainly due to the increase in restricted stock amortization expenses. Looking ahead to the whole of 2019, the management expense ratio is expected to continue to decline, mainly due to the improvement in the efficiency of the company's traditional main bank network center management platform software and related integrated services, the degree of standardization of platform software, and obvious results in implementation process control, resulting in a reduction in the company's marginal costs, while the management expense ratio will decrease. There is an inflection point in the smart social, prison, and drug rehabilitation markets. Public safety business development and innovative policies are frequently promoting the development of the information technology industry for the administration of justice. Smart social institutions and smart prisons are listed as key construction topics. As a nationalized provider of smart justice solutions, Runan Technology, a subsidiary of Haoyun Technology Holdings, has taken the lead in launching smart social corrections products in Guangdong and is about to expand offsite. Under the operating model, it is expected to contribute considerable profit elasticity to Runan Technology; the 10 billion smart prison market is about to explode, and Runan Technology has set benchmarks in many places and is expected to be promoted rapidly. Furthermore, the public safety business smoothly transitioned to back-end intelligence, and off-site orders continued to be collected, and orders began to explode in 2019. Risk warning: The process of building informatization in the administration of justice falls short of expectations; Runan Technology's offsite business expansion falls short of expectations; and competition in financial security has intensified. Investment advice: Maintain profit forecasts and maintain an “increase in holdings” rating. Net profit is estimated at 2.01/2.85/347 million yuan in 2019-2021, with a year-on-year growth rate of 43/42/ 22%; diluted EPS = 0.49/0.70/0.85 yuan; the current stock price corresponds to PE = 29/21/17x. The company's smart justice business is about to explode. Safe City's business is rapidly expanding from other locations, driving rapid growth in performance, and maintaining rapid growth in performance in the first quarter of the “increase in holdings”. The increase in public safety business contributions achieved revenue of 147 million yuan (+14.8%) in Q1 in 2019, net profit of 103.389 million yuan (+63.28%), net profit of 7.262 million yuan (+42.02%), and net profit of 7.2602 million yuan (+42.02%). The company's performance has maintained relatively rapid growth, is in the middle of the performance forecast range, and profits are growing rapidly. During the reporting period, the company's main business continued to grow steadily, and public safety business revenue increased compared to the same period last year, leading to an increase in net profit during the reporting period. Gross margin increased steadily, and the three expense ratios increased slightly. The gross profit margin of sales in 2018 was 40.87%, up 1.92pp from the previous year, and the gross margin of business continued to increase. The sales expense ratio is 12.71% (-0.49pp), the management fee rate is 22.49% (+1.75pp), and the financial expense ratio is -0.20% (-0.08pp). The total cost rate for the three categories was 35.00%, up 1.18pp from the previous year. Management expenses increased by 7.1058 million yuan over the same period last year, mainly due to the increase in restricted stock amortization expenses. Looking ahead to the whole of 2019, the management expense ratio is expected to continue to decline, mainly due to the improvement in the efficiency of the company's traditional main bank network center management platform software and related integrated services, the degree of standardization of platform software, and obvious results in implementation process control, resulting in a reduction in the company's marginal costs, while the management expense ratio will decrease. There is an inflection point in the smart social, prison, and drug rehabilitation markets. Public safety business development and innovative policies are frequently promoting the development of the information technology industry for the administration of justice. Smart social institutions and smart prisons are listed as key construction topics. As a nationalized provider of smart justice solutions, Runan Technology, a subsidiary of Haoyun Technology Holdings, has taken the lead in launching smart social corrections products in Guangdong and is about to expand offsite. Under the operating model, it is expected to contribute considerable profit elasticity to Runan Technology; the 10 billion smart prison market is about to explode, and Runan Technology has set benchmarks in many places and is expected to be promoted rapidly. Furthermore, the public safety business smoothly transitioned to back-end intelligence, and off-site orders continued to be collected, and orders began to explode in 2019. Risk warning: The process of building informatization in the administration of justice falls short of expectations; Runan Technology's offsite business expansion falls short of expectations; and competition in financial security has intensified. Investment advice: Maintain profit forecasts and maintain an “increase in holdings” rating. Net profit is estimated at 2.01/2.85/347 million yuan in 2019-2021, with a year-on-year growth rate of 43/42/ 22%; diluted EPS = 0.49/0.70/0.85 yuan; the current stock price corresponds to PE = 29/21/17x. The company's smart justice business is about to explode, and Ping An City's business is rapidly expanding from other locations, driving rapid growth in performance and maintaining the “increase in holdings” rating.