Event: The company released its 2019 third quarter report on October 21, 2019. In the first three quarters of 2019, the company achieved revenue of 1,431 billion yuan, an increase of 60.13% over the previous year, and realized net profit of 98 million yuan, an increase of 282.56% over the previous year. Among them, the third quarter achieved revenue of 522 million yuan, an increase of 49.59% over the previous year, and realized net profit of 38 million yuan, an increase of 207.89% over the previous year. The performance was in line with expectations. The Q3 performance was in line with expectations, and the year-on-year growth rate remained high. Previously, the company expected the net profit growth rate range for the first three quarters of this year to be (230%, 330%), and the actual growth rate was 282.56%, which is in the middle of the forecast range, in line with expectations. On a quarterly basis, in terms of revenue, Q1, Q2, and Q3 increased by 30.21%, 102.74%, and 49.59%, respectively. In terms of net profit, Q1, Q2, and Q3 increased by 133.78%, 546.09%, and 207.89%, respectively. Overall, although the year-on-year growth rate of revenue and net profit slowed somewhat, it remained high. Profitability has been growing steadily, and cost control capabilities have been enhanced. In terms of gross sales margin, the company's gross margin for the first three quarters was 19.69%, up 4.96 percentage points from the same period last year. In terms of net sales margin, the company's net profit margin for the first three quarters was 7.78%, up 4.65 percentage points from the same period last year, and overall profitability maintained an upward trend. In terms of cost control, the company's expense rates for the period from the beginning of the year to the Q1, H1, and Q3 reporting periods were 10.48%, 9.51%, and 9.43%, respectively. There was a gradual downward trend, and cost control improved. In terms of R&D investment, the company continued to increase investment, and the proportion of R&D expenses in revenue increased from 3.7% in Q1 to 4.41% in Q3. The trend of 5G construction has led to an increase in performance. According to the forecast of the China Industrial Information Network, the number of 5G Acer stations is about 1.5 times that of 4G base stations. At the same time, the demand for antennas for 5G single base station equipment has increased exponentially, and the unit price of antennas has also risen compared to the 4G era. The antenna market will benefit from a sharp rise in volume and price. As metal filters face technical bottlenecks in the 5G era, the emergence of ceramic filters will effectively solve the problem. Ceramic filters have characteristics such as high dielectric constants and small size, but currently the technology is not fully mature and production capacity is low. As 5G construction continues to advance, relevant manufacturers are also speeding up their deployment in this field. The company's share of revenue in the mobile communications business continues to increase. Currently, the company mainly produces antennas and filters. The company began deploying ceramic filters in the first half of 2019. After mass production of products, it is expected to bring about a new round of performance growth. The main customers of the company's mobile communications business are mobile communication equipment integrators downstream in the communications industry, such as ZTE and Ericsson. ZTE is an important customer of the company. Bulk shipments of antenna products have begun, and 5G filters have also been delivered. In order to get rid of its dependence on a single major ZTE customer and actively explore the market, the company set up a joint venture in the US to develop the local antenna market and received the first batch of orders at the end of 2018 for the North American market. Furthermore, the company entered the Ericsson supply chain in 2019 and began supplying in small quantities. With the gradual acceleration of 5G construction, the company's layout of antennas and filters will have an effect on improving performance. Profit forecasts and investment advice. It is estimated that the company's EPS in 2019-2020 will be 0.93 yuan and 1.44 yuan respectively, and the corresponding PE will be 39 times and 26 times, respectively. First coverage, a recommendation rating is given. Risk warning: base station construction falls short of expectations, 5G progress is not as good as expected, peripheral factors interfere, etc.