The 1Q19 results were in line with expectations, and Suzhou Keda announced 1Q19 results: operating income of 566 million yuan, up 20.72% year on year; net profit attributable to parent company was 50.17 million, up 27.97% year on year, corresponding to profit of 0.14 yuan per share. The performance was in line with expectations. The main positive factor in the development trend: There has been an improvement in operating cash flow: the company's 1Q19 operating cash flow was 31.1061 million yuan, an improvement over -71.707 million yuan in the same period last year, due to improved receipts from major companies. Management expenses declined slightly: The company's 1Q19 management expenses reached 34.8651 million yuan, a decrease of 16.7% compared to the same period last year, mainly due to a decrease in equity incentive expenses. Main negative factors: A sharp increase in long-term receivables: The company's 1Q19 long-term receivables were 72.2746 million, an increase of 138.65% over the same period last year, mainly due to the company winning the bid for the Fengning Manchu Autonomous County smart city PPP project in March 2018 and the initial investment in construction. Increase in long-term loans: The company's 1Q19 long-term loans increased by 41.25% compared to the same period last year. They are also loans for Fengning PPP projects. High sales expenses: The company's 1Q19 sales expenses were 144 million, an increase of 39.6% over the same period last year, a significant increase compared to the 19% growth rate of 1Q18 sales expenses, and higher than the revenue growth rate during the same period, mainly due to a sharp increase in sales expenses due to the increase in the company's sales volume. Profit forecast We maintain the 2019/20e net profit forecast of 431/526 million yuan unchanged. The valuation and recommended company's current stock price corresponds to 18.3/15.0 times P/E in 19/20, and PEG in 2019 is 0.54. Maintaining the “recommended” rating and target price of 30.00 yuan, corresponding to 25.1/20.5 times P/E in 19/20, there is 37% margin compared to the current stock price. The risky video conferencing and video surveillance business fell short of expectations.