Guide to this report: The company's performance fell short of expectations in the second quarter due to seasonal disturbances and delays in the implementation of some businesses. The company's strategy is to increase investment in cloud video and artificial intelligence. R&D advantages and customer advantages are still remarkable, and we are waiting for performance to recover. Key investment points: Maintain an “excess” rating. In the first half of 2019, the company achieved revenue of 1,085 million yuan, an increase of 10.01% over the previous year, and realized net profit of 10.543 million yuan, a year-on-year decrease of 88.47%. The performance fell short of expectations. The 2019 net profit forecast was lowered to 380 million yuan (-2.81%), EPS to 0.75 yuan (-3.85%), maintaining the 2020-2021 net profit forecast at 466 million yuan and 605 million yuan respectively, and the EPS forecast at 0.92 yuan and 1.20 yuan respectively, giving the company a valuation of 30 times 2019 and maintaining the target price of 22.74 yuan. Seasonal disturbances and delays in business implementation are compounded by cost rigidity, and the company experienced a period of performance pain. Demand in the second quarter was relatively weak, business implementation was delayed, and investment in cloud video and artificial intelligence increased. Net profit fluctuated greatly compared to the same period. Revenue is expected to improve in the third and fourth quarter. Affected by the small base and product structure, gross margin declined but was higher than that of competitors. It is expected that the gross margin level will rise somewhat along with rising revenue and improved business structure in the second half of the year. The video conferencing industry is growing steadily, cloud video has huge potential, and the company's strategy is clear and the advantages are remarkable, waiting for performance to recover. The company's position in the hardware video field continues to improve. In 2011, it deployed cloud video and issued convertible bonds to continue to increase R&D investment in the cloud video field. The company has a clear strategy for developing cloud video and integrated video service solutions, has a long business history, and obvious advantages in customer resources and R&D. With the implementation of the company's new business and increased sales channel efficiency, it is expected that the company's performance will recover. Catalysts: Accelerated implementation of new business, increased government bidding, and smooth expansion of cloud video R&D. Risk factors: New business implementation falls short of expectations; industry competition intensifies; technology research and development falls short of expectations.