Revenue increased 19.22%, profit increased 1.61%, and the growth logic remained unchanged. Maintaining the “buy” rating, the company released the 2019 semi-annual report on August 29, 2019, achieving revenue of 469 million yuan (YOY +19.22%); achieving net profit of 69 million yuan (YOY +1.61%); basic earnings per share of 0.06 yuan. Stable performance, in line with market expectations. We expect the company's EPS to be 0.20 yuan, 0.28 yuan, and 0.35 yuan respectively from 2019 to 2021. The company is in a period of rapid development, has a lot of room for growth, and maintains a “buy” rating. R&D investment increased, and the acquisition of assets steadily promoted the company's R&D investment of 24.2 million in 2019H1 and 21.76 million in 18H1, an increase of 11.21% over the previous year, and the company continued to increase R&D investment. On January 26, 2019, the company announced a plan to acquire assets. It plans to purchase 100% of the shares of Xi'an Hengda and Jiangsu Hengda for 625 million yuan through a combination of issuing convertible bonds, shares and cash payment methods. Hengda Microwave has core competitiveness in millimeter-wave antenna dark chambers and array antenna test solutions, providing effective support for the development of listed companies' automotive radar business. On July 28, the company received an inquiry letter on licensing restructuring from the Shenzhen Stock Exchange and responded to it. Currently, the acquisition process is progressing steadily. The military goods business revolves around the field of electronic informatization. The company's business segments with outstanding innovation capabilities are divided into five segments: radar systems, intelligent ammunition, satellite applications, secure storage, and intelligent networking. Some of the company's military products are in the early stages of finalization. According to the 19th semi-annual report, the company successively finalized two types of special radars into small-batch production; in the field of satellite applications, the company achieved the first in-orbit imaging processing of space-borne radar in China; in the field of safe storage, the company became one of the first domestic enterprises to enter the “List of Autonomous Controllable Products for Key Military Software and Hardware”. After military products enter the formalization stage, they have begun to enter the upper volume period, and this part of the performance is expected to grow rapidly. On April 1, 2019, the company announced that Liu Sheng, vice chairman, was selected as a leading talent in the national “10,000 People Program”, showing that the company has outstanding ability to innovate. The intelligent connectivity business is being actively promoted, and is expected to become a new performance growth point for the company in the future. The company has launched a series of civilian radar products such as 77G millimeter wave car radar based on its leading military radar technology. Its millimeter wave car radar is the only domestic partner manufacturer of Baidu's driverless driving program, and is actively participating in the construction of road network monitoring systems in smart cities around the world. Millimeter-wave radar and high-precision positioning solutions are participating in the BYD D-link program. The company's self-developed 804T6 millimeter-wave automotive front collision avoidance radar and SRR402T6 angle radar have now received tens of thousands of batch orders. The automotive automatic emergency braking system (AEBS) developed by the company is undergoing marketing work and is expected to achieve rapid growth. The system is flexible, radar technology is leading, and the military and civilian products business is developing smoothly. It maintains the technological leadership of “buy” rating companies, and has a high popularity in industry segments. Radar and smart ammunition products are gradually entering the mass production period, and the intelligent connected business is being promoted in the market. We expect net profit from 2019 to 2021 to be 222 million yuan, 303 million yuan, and 376 million yuan respectively, corresponding to EPS of 0.20 yuan, 0.28 yuan, and 0.35 yuan, respectively. Comparatively, the company Wind unanimously predicted 53.71 times PE in 2019. We consider that the company's market expansion will still take some time. We will give the company 35 to 38 times PE in 2019, and the target price is 7.0 to 7.6 yuan, maintaining a “buy” rating. Risk warning: Military spending growth fell short of expectations, and demand for civilian goods fell short of expectations.