1. Event Overview The company released its 2019 mid-year report: achieved revenue of 909 million yuan, an increase of 66.87% over the previous year; net profit of the mother was 604.374 million yuan, an increase of 350.88% over the previous year. 2. Analysis and judgment The communication business grew rapidly, and the share of 5G continued to rise. In the first half of 2019, the company continued to advance in precision cabinet system business and mobile communication equipment business, and achieved rapid growth in revenue and profit. The company's traditional business, elevator car system revenue, was 233 million yuan, an increase of 2.49% over the previous year. The company's mobile communication equipment business revenue was 608 million yuan, including metal filter revenue of 259 million yuan, an increase of 141.65% over the previous year; ceramic filter revenue of 3.09 million yuan; and antenna revenue of 286 million yuan, an increase of 141.34% over the previous year. There was a significant year-on-year increase in mobile communication equipment-related products, mainly due to the deep coverage of 4G networks by domestic and Japanese operators and the rapid acceleration of 5G base station construction, which led to a sharp increase in demand for the company's mobile communication equipment products. During the reporting period, the company's overall gross margin level reached 20.20%, mainly due to the continuous increase in the share of 5G business revenue. Ericsson was successfully introduced, and the US business progressed smoothly, and Beaufort, a subsidiary of the company, is the core supplier of filters and antennas for ZTE, a global core equipment company. With the issuance of 5G licenses and the acceleration of operators' 5G investment, 5G shipments increased markedly in the second quarter. At the same time, through early accumulation, Beaufort successfully passed the Ericsson test and officially became an Ericsson supplier. It is expected that the second half of the year will generate revenue and profit, and customer resources will be further enriched. In addition, the company established its subsidiary Dengyo USA in the US to actively expand the North American antenna market and form a global layout. R&D investment has increased, and dielectric filters have made phased progress. In the first half of 2019, the company invested 33.8273 million yuan in R&D, an increase of 61.09% over the previous year, mainly for the research and development of existing 4G RF devices and antennas, and established the “Suzhou 5G Communication Equipment Engineering Technology Research and Development Center” to actively carry out 5G product research and development. In order to improve the category of filter products and lay out ceramic waveguide filter products in advance, during the reporting period, the company acquired Jetpin Electronics through equity transfers to prepare for seizing market opportunities in future large-scale 5G base station construction. 3. The investment proposal predicts that the company's EPS from 2019 to 2021 will be 1.45, 2.88, and 3.52 yuan, respectively, and the corresponding PE will be 30 times, 15 times, and 12 times. The company's average PE value and minimum value in the past three years were 96 and 37 times, respectively. Maintain a “Recommended” rating. 4. Risk warning: 5G development falls short of expectations; media filter production expansion falls short of expectations.