Weishijiajie, a leading ICT (Information, Communication and Technology) distributor in the Asia-Pacific region, announced 1H19 results: revenue of HK$30 billion (+7.5%) for the first half of 2019. Gross profit of HK$1.43 billion (+14.1%), gross profit margin of 4.8% (+0.3 pts). Net profit of the mother was HK$392 million (+8.3%). In the first half of 2019, inventory fell 4.9% month-on-month, inventory turnover days were 37 days, receivable turnover days were 69 days, payable turnover days were 47 days, operating turnover days were 59 days, and ROE reached a new high of 16.2% in the current period. Segment performance: cloud computing and big data business revenue of HK$7.36 billion (+11.1%), accounting for 24.5%; network and information security business revenue of HK$4.08 billion (+15.5%), accounting for 13.6%; mobile terminal business revenue of HK$12.08 billion (-4.4%), accounting for 40.2%; accessories business revenue of HK$6.52 billion (+26.4%), accounting for 21.7%. Under the downward pressure of trade friction and traditional distribution, efforts are being made to promote innovative technology businesses and expand industrial lines. As a leading ICT distribution company in Asia Pacific, Weishijiajie launched industry and enterprise-level IT services in the first half of 2019, including becoming the general agent of iFLYTEK's smart voice recorder in mainland China; further business cooperation and exchanges with HP on 3D printing in China; and becoming the general agent for Enlightenment Smart's “Intelligent Education Artificial Intelligence Laboratory” in mainland China. Growth in SSD revenue in the first half of the year drove growth in the accessories business. Continue to vigorously deploy cloud computing business and deepen cooperation with Alibaba Cloud. The company became the general distributor of Alibaba Cloud nationwide in March 2019, and strengthened strategic cooperation with Alibaba Cloud in the first half of 2019. In addition, the company also became the first-level agent for Zhongke Cloud's facial recognition products and solutions, and the national general agent of Coolstack Technology. Revenue from the Cloud Computing and Big Data and Cybersecurity segments increased by 11.1% and 15.5% respectively in the current period, and future growth is expected. Investment advice: Maintain the target price of HK$5.01. We expect the company's revenue for 2019/20/21 to be HK$718/820/91.3 billion and net profit of HK$8.4/9.8/HK$1.13 billion. The PE corresponding to 19/20/21 is 8.6/7.4/6.5, with an expected increase of 29.5%. Maintain a “prudent increase in holdings” rating. Risk warning: 1. Macroeconomic growth falls short of expectations; 2. Competition in the ICT distribution industry intensifies; 3. Business progress fell short of expectations; 4. Bad debt risk