The company achieved EPS of 0.14 yuan in 2018. During the reporting period, the company's net profit declined due to steady growth in revenue, increased expenses, and preparation for asset impairment. Considering the pressure on short-term performance due to the increase in the company's expenses, the company's 2019/20 EPS forecast was lowered to 0.20/0.25 yuan (the original forecast was 0.31/0.38 yuan), giving the company an EPS forecast of 0.31 yuan for 2021. The comprehensive industry maintains a “buy” rating, and the company's market position in aerospace electronics and satellite big data, with a target price of 13 yuan. Expenses and asset impairment losses were accrued during the period, and performance declined year-on-year. The company's 2018 revenue was 906 million yuan (+22.62% YoY) and net profit to mother was 95 million yuan (-21.47% YoY), achieving EPS of 0.14 yuan. During the reporting period, the company's revenue from integrated circuits, security, surveying and mapping, and big data operation and maintenance increased steadily, and gross margin was basically the same as the same period last year. The increase in sales staff wages led to a 29.50% year-on-year increase in sales expenses. Depreciation and amortization of fixed assets and intangible assets related to satellites led to a 58% year-on-year increase in management expenses. Financial expenses and R&D expenses also increased significantly. At the same time, impairment reserves for various types of assets were calculated at about 40 million yuan. The company's performance declined in the short term. In the future, with the expansion of the aerospace electronics and security surveying and mapping business markets and the satellite big data business gradually contributing profit growth points, the company's performance is expected to improve. Aerospace electronics business: Continued development of products and markets is expected to benefit from the rapid development of the aerospace industry. The company is a leading domestic enterprise of high-end aerospace processor SoC and stereoscopic SIP aerospace modules/systems. In 2018, the company's integrated circuit revenue was 158 million yuan, up 23.4% year on year, and gross margin increased 5.3 pcts year on year. The number of space launches in 2019 is expected to exceed 30, and more than 50 spacecraft will be launched. The company has passed the review of supporting component suppliers for aerospace science and technology models and has become a qualified supplier at the space group level. It is expected to fully benefit from China's rapid aerospace development and the increase in the localization rate of aerospace chips. In addition, the company is actively expanding the China Institute of Engineering Physics, military customers in the fields of airborne and ammunition, as well as overseas markets such as Russia, Sweden, and Italy, and lays out high-speed bus testing technology such as TTE and FC, and DDR series products to create a business growth point. Satellite big data business: Continued development of government and industry customers is expected to gradually contribute to profits. In 2018, the company completed the launch of the “Zhuhai-1” constellation 02 satellites and gradually improved the construction of a satellite ground station. Currently, the “Zhuhai-1” constellation already has quantitative remote sensing capabilities. The company continues to expand the downstream satellite remote sensing application market, reached strategic cooperation intentions for data services with multiple military branches, reached strategic cooperation intentions for data services, implemented a green water and green mountain map application demonstration project in Zhuhai, Guangdong, and launched large-scale projects such as satellite remote sensing platforms, satellite ground stations, and satellite joint launches in Shanxi, Hunan and other provinces. In 2018, the company's satellite big data achieved revenue of 7.86 million. In the future, as more projects are launched, it is expected to gradually contribute to profits. Security, surveying and mapping businesses: The business is growing rapidly, and the development prospects are positive. The company's security business revenue in 2018 was 380 million yuan, an increase of 14.5% over the previous year. The subsidiary Platinum Information had good market continuity in government, public security, administration of justice, education, operators, etc., and its share of output in markets outside Guangzhou increased further, and the market area continued to expand. In 2018, the surveying and mapping business revenue was 280 million yuan, an increase of 34.7% over the previous year. The subsidiary Huiyu Intelligence actively developed new markets, achieved significant growth in comprehensive urban pipeline inspection, dredging and repair, and also made major breakthroughs in drone aerial survey and 3D inclined projection platforms. In addition, the company has also established the artificial intelligence business as a new strategic development direction and is actively promoting the development of two artificial intelligence chips. With the continuous expansion of the company's market and the upgrading and optimization of its business, the development prospects for security, surveying and mapping, artificial intelligence and other businesses are improving. Risk factors: The progress of the satellite constellation project falls short of expectations; product market expansion falls short of expectations; risk of losing technical personnel. Investment advice: Considering the pressure on short-term performance due to the increase in the company's expenses, the company's 2019/20 EPS forecast was lowered to 0.20/0.25 yuan (the original forecast was 0.31/0.38 yuan), and the company's 2021 EPS forecast was given 0.31 yuan. The current price is 10.32 yuan, corresponding to 2019/20/21 PE, which is 35/28/23 times, respectively. The comprehensive industry's comparable valuation level and the company's market position in the aerospace electronics and satellite big data fields maintain a “buy” rating, with a target price of 13 yuan (corresponding to 65 times PE in 2019).