Walter shares: 5G material research and development continues to advance Walter's products include engineering plastic alloys, special engineering plastics, and modified general plastics. The main applications are in communications, electronics, home appliances, office equipment, aviation and other fields. The company's 5G material research and development continues to advance, carrying out material development and preparation process research on materials for 5G base stations and communication terminals. The high-frequency PCB industry has moved eastward, and upstream PTFE has ushered in the 5G era. The hardware architecture of the downstream base station end of the high-frequency PCB industry chain has been upgraded, conveying incremental demand to midstream high-frequency copper clad plates and upstream raw materials. As the mainstream solution for high-frequency copper-clad plates, PTFE will achieve a sharp increase in volume and price during the 5G base station construction cycle. In the field of PTFE, there is a lot of room for domestic demand for PTFE, but the supply has been controlled by overseas giants for a long time. As an enterprise scarce to master the R&D technology of PTFE materials, there is considerable room for domestic replacement in the future. The 5G terminal antenna process has been upgraded, and LCP materials are on the rise. LCP materials are suitable for high-frequency device manufacturing, and are expected to become important upstream raw materials for terminal injection parts and antennas in the 5G high-frequency field. Domestic manufacturers focus on the downstream sector, and in the future, it is expected that the LCP industry chain will be replaced by domestic production through upstream transmission. Currently, the company's LCP material products have the ability to participate in global technology competitiveness. As 5G construction progresses, the company is expected to use its technology accumulation and cost performance advantages to change the situation where the upstream and middle reaches have been occupied by overseas suppliers for a long time. As a scarce domestic manufacturer of PTFE materials and a leading enterprise in LCP material technology, Investment Rating Co., Ltd. is driving the increase in the introduction of mobile terminal antennas and high-frequency PCBs in base stations as 5G advances, and broad space in the industrial sector. It is estimated that the company's EPS in 2019-2021 will be 0.51/1.01/2.23 yuan, respectively, and the corresponding PE will be 37.57/18.97/8.59 times according to the latest closing price. Considering comparable company valuations, we gave the company 0.5xPEG in 2019, combined with the compound growth rate of performance in 2019-2021, corresponding to 48xPE in '19. The company's reasonable value was 24.48 yuan/share, covering the first time, and giving it a “buy” rating. Risks suggest that the 5G process has fallen short of expectations; customer penetration falls short of expectations due to certification, technology, etc.; production capacity of new businesses falls short of expectations; rising costs under environmental policies; increased industry competition; and changes in the downstream demand environment.