Delays in military product delivery have led to business twists and turns. The prospects for military products are broad. Maintaining the “buy” rating, the new aviation technology period achieved operating income of 755 million, an increase of 59.4% over the previous year. The main increase came from MMRO mergers and acquisitions; net profit was 50.3 million, down 24.58% from the previous year. The performance fell short of expectations, mainly due to factors such as delays in the signing and payment of some contracts for equipment development and security, as well as intermediary expenses. However, the company is one of the few domestic enterprises with ATE R&D and large-scale production capabilities for airborne equipment, and military products have broad market prospects. As the implementation of the 13th Five-Year Plan enters the final two years, we believe that the company's military business is expected to be on the right track in 2019. It is expected that the EPS for 2019-2021 will be 0.43, 0.59, and 0.78 yuan respectively, maintaining the “buy” rating. There were twists and turns in military delivery. Brokerage fees and interest expenses offset MMRO's performance contributing company's equipment development and security business in 2018, a year-on-year decrease of 30.44%, mainly due to delays in signing some contracts and payment progress due to factors such as customer agency adjustments, which could not be confirmed during this reporting period. The aviation maintenance and service business achieved revenue of 589 million dollars, an increase of 140.30% over the previous year, mainly due to MMRO mergers, but intermediary expenses during the period were 16.6745 million, a sharp increase of more than 12 million over the previous year. In addition, increases in depreciation and amortization expenses and interest expenses offset the contribution of the aviation maintenance business to MMRO. Furthermore, the new business carried out by some subsidiaries has not yet reached scale, and no profit was achieved during the reporting period, which had a certain impact on the company's net profit. A leading domestic third-party aviation maintenance company, MMRO mergers and acquisitions to improve industrial layout The company is a leading domestic third-party aviation maintenance enterprise. Through the acquisition of MMRO, it has expanded from the company's traditional department and accessory maintenance to the field of complete aircraft maintenance, including aircraft route maintenance and base maintenance, and has achieved the entire industry chain layout in the field of aviation maintenance and service. At the same time, the company's market has also expanded from being mainly concentrated in China and Southeast Asia to a wider global market in many countries in Europe and Africa, and is moving towards global development. The technical capabilities of automated test equipment are outstanding. The airborne equipment is accelerating with the development of the downstream military helicopter industry, and the next generation test system that the company is currently researching and implementing. The goal is to meet the requirements for compatibility in internal and external testing, reduce the number of user configuration support equipment, and reduce costs. We believe that these performance characteristics are of great significance in improving the deployment capability and combat readiness rate of military aircraft. According to our military's current scale of first-line military aircraft, according to the 8:1 ratio and 2:1 backup ratio, the total scale of ATE support equipment for domestic fixed-wing military aircraft alone is over 67-101 billion yuan, and there is a need for continuous upgrades and updates in the future. The company's helicopter vibration monitoring and health diagnosis system has been certified and tested. As the implementation of the 13th Five-Year Plan enters the final two years, it is expected that the development of the airborne equipment business will begin to accelerate with the installation of downstream military helicopters. Business development in 2019 is expected to be on the right track. The prospects for military products are broad, and the “buy” rating is maintained. We expect the company's operating income in 2019-2021 to be 1,006 billion yuan, 1,194 billion yuan and 1,371 million yuan respectively, and net profit of 102 million yuan, 142 million yuan and 187 million yuan respectively (19/20 before adjustment was 210/286 million yuan), corresponding to EPS of 0.43, 0.59 and 0.78 yuan respectively (19/20 before adjustment was 0.88/1.19 yuan) 。 The average valuation of comparable listings in the same industry was 45.22 times in 2019. We are optimistic about the strategic layout of the company's aviation maintenance and the development prospects of military equipment. Its technical advantages in the military field have a certain valuation premium basis. It gave a PE valuation of 48-50 times in 2019, with a target price of 20.64-21.50 yuan/share, maintaining the “buy” rating. Risk warning: equipment development and guarantee of new product development or delivery that does not meet expectations, aviation maintenance extension business development or does not meet expectations, etc.