Guide to this report: The company recently released its 2019 semi-annual report. The performance exceeded market expectations. At the same time, the gross margin of the company's communications business increased significantly, and 5G acceleration is expected to improve the company's performance marginally. Key investment points: Maintain the “Overweight” rating and keep the 2019 target price of 54 yuan unchanged. We kept Sega Technology's net profit of 181 million yuan, 250 million, and 305 million yuan unchanged, corresponding EPS of 1.08 yuan, 1.49 yuan, and 1.82 yuan respectively, maintaining the 2019 target price of 54 yuan, and maintaining the “increase” rating. Benefiting from the acceleration of 5G, the company's performance exceeded expectations. The company's Q2 performance exceeded market expectations. Combined with the company's 2019 semi-annual report, net profit for Q2 in 2019 reached 45.6 million, up 545.9% year-on-year and 207.3% month-on-month, exceeding market expectations. The company's net profit for the first half of 2019 was 604.37 million. If the traditional elevator business is not taken into account, the mobile communication related business contributed more than 50 million to the mother's net profit in the first half of 2019, exceeding market expectations. On June 6 of this year, the Ministry of Industry and Information Technology issued a 5G commercial license. The construction of 5G base stations across the country has greatly accelerated, further boosting the demand for filters and antenna products in the 5G upstream industry chain, resulting in the company's mobile communications business operating performance exceeding expectations. The gross margin of the company's communications business has increased dramatically, and future performance is expected to improve marginally. Judging from the 2019 mid-year report, the gross margin of RF devices for the company's communications business products increased by 3.35% (17.04%), and the gross margin of the antenna business increased by 10.72% (29.28%), indicating that the company's product structure is further optimized and priority will be given to enjoying the dividends brought by communication technology upgrades. As ZTE's core supplier, on the one hand, 3.5G antennas and filters account for the first tier share. On the other hand, the company already has the supply capacity for 2.6G antenna products and dielectric filters. With the full deployment of 5G at home and abroad, the company's performance is expected to improve marginally in the future. Catalysts: 5G large-scale commercial use, and the expansion of new customers such as Ericsson is progressing steadily. Risk warning: The trade war between China and the US poses a risk of uncertainty, and 5G scale commercial use falls short of expectations.