The communications business has consolidated the foundation for development, and the military business opens up space for growth. The company is mainly engaged in the development and production of RF cables for communication applications. It has high-quality downstream customer resources and is the main supplier of cable products related to Huawei, ZTE, and Ericsson base stations. Since its launch, the company has continued to open up new markets through endogenous and epitaxial research and development of new products. In 2015, the company established Changsha Jinxinuo Defense Company to lay out military business, which is one of the few private enterprises with system-level qualifications in China. In 2019, China's 5G pre-commercialization is expected to bring about an improvement in capital expenditure and promote the recovery of the company's main business. Furthermore, research and development of underwater defense products has been completed, and it is expected to create a new growth pole with the implementation of military orders. We expect the company's EPS for 18-20 years to be 0.31/0.44/0.60 yuan respectively, which will give a “buy” rating for the first time. 5G commercialization helps the main communications business return to a growth trajectory. Currently, China is on the eve of 5G commercialization. In 2019, operators' 5G pre-commercial construction is expected to drive an improvement in the industry's capital expenditure. In recent years, the company has continued to promote 5G product research and development, and has made R&D breakthroughs in 5G antenna core technology, core chip design and module production with partners. On the wireless side, the company can provide overall 5G base station solutions, including BTS base station solutions, etc. In the chip sector, Jiangsu Wanbang Microelectronics, a subsidiary of the company, has a deep accumulation of core localized chips for active phased array radars, and the company is expected to use Wanbang to promote its business expansion in 5G RF. The military industry opens up room for growth In recent years, China's offshore defense forms have been severe, and the frequency of foreign coastal investigations against China has shown an increasing trend. Against this backdrop, an offshore underwater defense system is ready to be developed. The company established Jinxinuo Changsha Defense Company in 2015 to engage in R&D, production, sales and system integration and technical services for underwater detection, identification, command, control, communication and warning systems with marine defense equipment and technology as the core. At present, judging from the company's product development process, various products have been developed, including anti-frogman combat systems, blue whale control systems, fixed and mobile sonar warning systems, etc. In the future, it is expected to break into the underwater defense market and open up room for growth. The first company to be covered with a “buy” rating is a core supplier of radio frequency cables on the communication base station side, while continuously expanding new application markets through the development of new products. Facing 5G commercial opportunities, the company lays out base station-side solutions and 5G core chips to continue to build industry competitiveness, and is expected to resume growth in the 5G cycle. Furthermore, the military business layout is expected to further open up room for growth. Refer to the average valuation of the industry in 2019 of 26x, giving the company a valuation of 26-28x in 2019, corresponding to a target price of 11.48-12.36 yuan. For the first time, coverage was given a “buy” rating. Risk warning: operators' capital expenditure falls short of expectations, 5G construction progress falls short of expectations; new product market expansion falls short of expectations, military tenders fall short of expectations.