Event description On June 5, 2019, the company issued the “2019 Plan for Non-public Issuance of A Shares”. Incident reviews help expand optical module production capacity and solidify the foundation for high growth: the company plans to raise 750 million yuan, of which about 650 million yuan is mainly used for high-speed digital communication and 5G optical module production capacity expansion at the Shanghai production base. The project construction period is one year. The project construction period is one year. It plans to achieve an annual output of 101,000, 50,000, and 180,000 5G optical modules, and 1.35 million 5G front-transmission optical modules, or nearly 1.7 billion yuan in incremental revenue, driving high growth in the company's optical module business and consolidating the foundation for high growth in the company's performance. Successful acceptance of major customers, deep benefits from autonomy and control: After the acquisition of Oclaro (Japan) related assets was carried out, the company's major customers accepted smoothly. Following the breakthrough that Amazon began batch shipping of 100G digital optical modules in May this year, the Huawei 5G front-transmission optical module tender successfully accepted Oclaro's market share. Other equipment vendors and major customers of cloud service providers are breaking through one after another; in the context of autonomy and control, Huawei will increase procurement of backtransmission optical modules for domestic high-end telecommunications, and the company may benefit from the scarce domestic telecom high-end optical module manufacturer, or in the future. Share or increase; company There are plenty of major clients to acquire assets, a relatively uniform share of revenue, and a single customer has strong risk resilience. The company set up overseas production bases earlier, and the opening of the Malaysian base will help avoid possible future product taxes. Small base stations are shipped in batches, and the wireless network equipment business continues to grow at a high level: in the 5G era, the small base station market space is vast, and the flexibility is greater than 4G. The company has successfully broken through large customers of equipment vendors, and the 4G/5G integrated small base station has achieved batch shipment. The estimated annual shipment volume is 100,000 to 200,000. Considering the size of equipment vendors, R&D strength and customer resource advantages, the company's future share of equipment suppliers in the small base station market will increase, and the business space is broad; traditional wireless network equipment business benefits from growing overseas demand and customer expansion or continued high growth, and is expected to drive the company's wireless network equipment business Continued high growth. Profit forecast and investment suggestions: The company issued a fixed increase plan to help expand optical module production capacity after implementation, or bring in incremental optical module revenue of nearly 1.7 billion yuan, consolidating the foundation for the company's high performance growth; after the Oclaro acquisition was implemented, the company successfully undertook major customers such as Amazon and Huawei, and other device vendors and cloud service provider customers are continuing to break through. Considering the company's rich acquisition of assets and the opening of production bases in Malaysia, external risk resilience is strong; the company's 4G/5G integrated small base stations are shipped in batches, and the market share of small base stations for future or beneficiary customers may increase. And others The wireless network equipment business continues to grow at a high rate. The company's net profit for 2019-2021 is estimated to be 1.20, 1.86 and 260 million yuan respectively, corresponding to PE 34, 22, and 16 times, with a “buying rating”. Risk warning: 1. There is still uncertainty about the “Huawei incident”; 2. The expansion of optical module production capacity fell short of expectations.