The company released its 2019 quarterly report, achieving operating income of 1,005 billion yuan, an increase of 101.92% over the previous year, and net profit of 13 million yuan, an increase of 151.14% over the previous year. First-quarter results exceeded expectations, and various businesses progressed in an orderly manner. The company's gross margin for the first quarter of 2019 was 16.16%, down 8.11 percentage points from the same period last year; net profit margin was 2.15%, up 0.68 percentage points from the same period last year; and the company's inventory declined sharply, mainly due to an increase in the share of distribution business. The company's telecommunications, finance, public security, enterprise and other businesses continue to advance in an orderly manner. Cloudification forms the driving force for the company's medium- to long-term development. On the one hand, the telecom industry is undergoing a cloud upgrade to BSS3.0, and the company continues to improve in the telecom BSS system market with its experience in Unicom Cloud; as Alibaba Cloud's platinum partner, the company and Alibaba Cloud are expanding smoothly in central enterprises; furthermore. After 18 years of cooperation with HUAWEI CLOUD in police cloud, orders were delayed due to changes in the country's organizational structure, and the development trend was still good in 19-20. Investment advice: We are optimistic that the boom in cloud computing will drive the company's business to leapfrog by leaps and bounds. The company's EPS for 2019-2020 is expected to be 0.70 yuan and 0.92 yuan respectively, maintaining the buy-A investment rating, and the target price for 6 months is 21 yuan. Risk warning: New business development falls short of expectations; degree of commercialization falls short of expectations