Main business. The company actively pursues the development path of civil-military integration, applies military technology to the civilian sector, and has gradually developed into a leading supplier of professional optical lenses in China. The company's products are divided into customized products and non-customized products, mainly including optical lenses, optoelectronic systems and optical components. Among them, customized products are mainly used in major national defense missions such as the “Shenzhou series” and “Chang'e lunar exploration”, and advanced weapons and equipment such as drones and helicopter gunships. Non-customized products mainly include civilian security lenses, vehicle lenses, infrared lenses, IoT lenses, etc., and are widely used in safe cities, smart cities, the Internet of Things, the Internet of Vehicles, and intelligent manufacturing. Currently, the company has established cooperative relationships with well-known artificial intelligence companies such as Huawei and Hikvision, focusing on emerging fields such as IoT lenses and AI lenses. The performance situation. In 2016-2018, the company's revenue was 469 million yuan, 580 million yuan and 552 million yuan respectively, and net profit was 72 million yuan, 91 million yuan, and 91 million yuan respectively. The compound growth rates of main business revenue and net profit in the three years were 8.48% and 12.67% respectively. In 2018, the company's gross margin was 34.27%, and the net profit margin was 16.56%. Industry position and competitive advantage. The company has been deeply involved in the field of optical lenses for many years. Currently, it has mastered many independent core products and technologies, such as large zoom ratio zoom lenses, large aperture transmission lenses, medium and long wavelength infrared zoom lenses, and high magnification zoom lenses. The performance of related products is already at the leading level in China, and some products can be imported and replaced. Among them, the company pioneered the design and manufacture of a large-aperture transmissive astronomical observation lens in the world; at the same time, self-developed multi-point zoom lenses have replaced imports from Japan. Benefiting from the high moat of optical lens technology, the company's products continue to be supplied to high-quality downstream customers, including core domestic military enterprises and domestic and foreign security leaders; the market share of core products is at the forefront of the industry. Among them, the company's global market share of security lenses reached 11.8% in 2017, ranking third in the world; the global market share of zoom lenses was 8.9%, ranking second in the world. Overall evaluation and valuation recommendations. The market for military and civilian optical lenses is huge. Judging from customized products, the company's products are mainly used in military special optical lenses and optoelectronic systems. As an indispensable and important part of aerospace engineering, military weapons, etc., it is expected that demand will continue to grow steadily in the future. Judging from non-customized products, benefiting from the trend of comprehensive penetration of security surveillance into various fields of society, and driven by related policies such as Xueliang Project, Safe City, and ultra-high-definition video, etc., the company's demand for optical lens products is expected to continue to expand, and the market prospects are broad. At the same time, since the company already has certain technical barriers, it has a considerable voice in the upstream field of optics, and it is expected that it will continue to enjoy the increase in market share brought about by technical barriers. In terms of valuation, we comprehensively consider the static PE of the benchmark company in 2019. We used the average value of PE of comparable companies in 2019 as the lower limit, the highest valuation among comparable companies as the upper limit, and gave the company's PE valuation range (27,44) times (27,44) times. According to Wind's unanimous expectations, the company's earnings per share in 2019 were 0.69 yuan, corresponding to a reasonable stock price range of (18.63-30.36) yuan/share. Risk warning. Competition in the industry has intensified, technology progress has fallen short of expectations, etc.