H1 Performance Forecast Steady Growth Rate The company released the 2019 semi-annual performance forecast on the evening of July 12. It is expected that in the first half of the year, the company will achieve net profit of 42.1986 million yuan to 46.034 million yuan, an increase of 10%-20% over the same period last year. Considering the high base due to early settlement of operator projects in the first half of last year, overall, the company's growth is steady. The company has long been deeply involved in vertical industries such as telecommunications, finance, and public security for many years, and has accumulated core advantages. It is expected to benefit from the opportunities brought by the growing popularity of IT cloud computing. Combined with the effects of cooperation with cloud computing giants such as Huawei and Ali, the steady and continuous growth in its performance has demonstrated its strong position. The company's 2019-2021 EPS is expected to be 0.44, 0.60, and 0.81 yuan respectively, maintaining the “buy” rating. The profit growth rate is in line with expectations, and strength is gradually highlighted. In the first half of 2019, the company achieved a 10%-20% year-on-year increase in net profit. Among them, the impact of non-recurring profit and loss on net profit was about 10 million yuan, and the net profit after deducting non-recurring net profit was about 9.7862 million yuan in the same period last year, up 12.8%-26.1% from 285.762 million yuan in the same period last year, in line with expectations. Also, considering that the company's business is customized project-based software, most of it was settled in the fourth quarter, but early settlement of operator projects in the first half of 2018 led to a 76.68% year-on-year increase in revenue in the telecommunications industry, so the net profit base was high. Judging from this, the company's current performance forecast growth rate is in line with expectations, and its ability to develop steadily is gradually highlighted. The 5G era has brought about continued growth in BOSS, and cross-industry cloud services effectively enhance profitability. As 5G construction continues to exceed expectations, the BOSS system is expected to benefit as an important component of the support network. Tianyuan Dico has a high market position in the traditional operator BOSS field, and continues to increase R&D in the 5G direction. It is expected to achieve a continuous increase in market share in the context of increasing market concentration. In addition, the company closely followed the development of the industry to lay out big data and new forms of cloud computing, and achieved strong cooperation with cloud computing giants such as Ali, Tencent, and Huawei to achieve cross-industry development. In the future, it is expected that cloud businesses such as operator BOSS and the government and industry industry “BOSS+” will expand, transforming customized business to modularity, effectively improving profitability. Finance and government business are blooming. Currently, the digital transformation of banks is gradually unfolding. Weinbett, which was previously acquired by the company, already has overall Internet finance solution capabilities, mainly including smart account systems, smart deposit systems, smart retail credit, smart payment systems, intelligent anti-money laundering, intelligent monitoring of suspicious transactions, intelligent marketing, etc., to help banks and Internet financial institutions rapidly expand online deposit, loan, and settlement financial services. Furthermore, Tianyuan Dico leverages the cloud-based business experience of telecom operators and other central enterprises to gradually explore the government sector and achieve rapid growth. Continued development and maintaining the “buy” rating We are optimistic about the core advantages that the company has accumulated over a long period of time in vertical industries. It is expected to benefit from the increase in application-level market concentration brought about by enterprise IT cloud-ization, forming a situation where the three major fields of operators, government, and finance are blooming more. The company's EPS for 2019-2021 is expected to be 0.44, 0.60, and 0.81 yuan respectively. Referring to the average PE level of A-shares and similar listed companies, the PE average level for similar listed companies is 27.85 times. Conservatively, the company's 19-year PE is 23-26 times, and the corresponding target price is 10.12-11.44 yuan/share, maintaining the “buy” rating. Risk warning: the risk of falling capital expenses for operators, the risk of increasing labor costs, and delays in bidding for public security projects.