The performance of 2019H1 grew rapidly. The financial business and the Ping'an City business contributed incrementally. The company released the 2019 semi-annual report on the evening of August 12. During the reporting period, the company achieved revenue of 265 million yuan (+19.38%), net profit of 14.6611 million yuan (+18.47%), and net profit of 1.0738 million yuan (+31.66%) after deducting non-return net profit of 1.0738 million yuan (+31.66%). The company's performance is in line with expectations and is in the lower part of the performance forecast range. The company's performance continued to grow rapidly, mainly due to the year-on-year increase in revenue from the financial business and the Ping'an City business. The advantages of traditional business are outstanding, and equity incentives and share repurchases demonstrate the company's strong position as a leader in the traditional financial business of development. During the reporting period, the company was shortlisted for two intelligent monitoring equipment from Bank of China Co., Ltd. and 12 technical defense equipment series product suppliers for China Minsheng Bank Co., Ltd., highlighting the outstanding advantages of the company's products. At the same time, the company granted 965,000 shares to 22 incentive recipients in the 2018 equity incentive plan to reserve some of the restricted stocks to promote the company's continuous improvement of the incentive mechanism and restraint mechanism, and build a platform for the common development of employees and the company. Furthermore, by the end of July, the company had repurchased 3,903,600 shares of the company's shares from the secondary market, accounting for 0.56% of the company's total share capital. The highest transaction price was 10.59 yuan/share, the lowest transaction price was 6.63 yuan/share, and the total transaction amount was about 40.12 million yuan, demonstrating confidence in development. The company continued to increase R&D investment and consolidate its position in the industry. The R&D investment during the reporting period was 367.916 million yuan, an increase of 62.33% over the previous year. The main reason is that the company increased R&D investment in R&D projects such as software-defined IoT application platforms, IoT intelligent management platforms (IOTMP), and IOTMP mobile devices. There is an inflection point in the smart social, prison, and drug rehabilitation markets. Public safety business development and innovative policies are frequently promoting the development of the information technology industry for the administration of justice. Smart societies and smart prisons are listed as key construction topics. As a nationalized provider of smart justice solutions, Runan Technology, a holding subsidiary of the company, has taken the lead in launching smart social corrections products in Guangdong and is about to expand from other locations. Under the operating model, it is expected to contribute considerable profit elasticity to Runan Technology; the smart prison 10 billion market is about to explode. Runan Technology has set benchmarks in many places and won a major prison order recently. The business is expected to be promoted rapidly with the help of both product advantages and experience. Furthermore, the public safety business smoothly transitioned to back-end intelligence. Offsite orders continued to be collected, and orders began to explode. Risk warning: The process of building informatization in the administration of justice falls short of expectations; Runan Technology's offsite business expansion falls short of expectations; and competition in financial security has intensified. Investment advice: Maintain an “overweight” rating. Net profit is estimated at 2.01/2.85/347 million yuan in 2019-2021, with a year-on-year growth rate of 43/42/ 22%; diluted EPS = 0.29/0.41/0.50 yuan. The current stock price corresponds to PE = 21/15/12x, maintaining the “increased holdings” rating.