This report is read as follows:

Travel light after the labor pains. Standard "Silicon Valley + Stanford" and "Guomai Science and Technology + Fuzhou Institute of Technology" to build a "1n" model of industry-university-research, consolidate the leading position of private communications planning and design, and seize the good opportunity for the growth of China's Internet of things market.

Main points of investment:

Maintain the "overweight" rating and maintain the target price of 14.00 yuan. Maintain the 2019-2021 net profit forecast of 350 million yuan, 446 million yuan, 576 million yuan, EPS forecast of 0.35,0.44,0.57 yuan, maintain the 2019 valuation of Guomai Technology 40 times, maintain the target price of 14.00 yuan, maintain the "overweight" rating.

Do subtraction first: peel off the low profit margin, non-strategic core business, pack light and multiply 5G Dongfeng again. 5G is coming, construction comes first, and the Internet of everything is the ultimate goal. In order to fully prepare for the 5G wave, the company spun off the Internet of things software and hardware equipment integration and terminal equipment sales business with low gross margin and non-strategic core in 2018, focusing on businesses with strong profitability and high fit with future strategies. It can reduce the burden for the company in the short term, travel light after the labor pains period, and focus on capital, research and development, and market capabilities on the planning, design and construction of 5G in the early stage and the Internet of things business in the later stage.

Then add: create the original "national vein" Internet of things business model, the standard "Silicon Valley + Stanford", "Guomai Technology + Fuzhou Institute of Technology" to build a "1N" industry-university-research group. The era of the Internet of things is an era of application fragmentation, and companies in the industry are faced with the question of whether to do specialization or long: limited space for a single vertical industry and large-scale R & D investment across industries. Fuzhou Institute of Technology can not only serve as the "internal stabilizer" of Guomai staff, but also bring good synergy to N businesses with the Internet of things as the strategic core, and support the strategic development of the company. at the same time, it also feeds the discipline construction of Fuzhou Science and Technology.

Catalyst: policies related to the Internet of things and industry-university-research frequently fall to the ground.

Risk hint: trade war makes 5G progress less than expected, technical risk, business expansion risk.