Incident: The company released its 2019 three-quarter report. Revenue for the first three quarters was 780 million yuan, up 113.66% year on year; net profit to mother was 164 million yuan, up 123.52% year on year. Among them, revenue for the third quarter was $480 million, up 291.13% year on year; net profit to mother was 109 million, up 430.51% year on year. Benefiting from ETC policy dividends, performance exploded. The company's Q3 revenue and profit growth rates were 291% and 431% respectively. Performance exploded, mainly due to ETC installation rate policy dividends. As of October 9, the total number of ETC users nationwide reached 143 million, an increase of about 67 million compared to the end of 2018, driving demand for the company's ETC products and related Bluetooth markets. In addition to ETC, the company's other wireless digital transmission chips and wireless audio chips continue to remain stable. The rate control is good, and the Q4 performance of active stocking is expected to continue to explode. The company's gross profit margin in Q3 was 36.61%, up 0.77 and 1.69 percentage points year-on-year, respectively. Mainly because ETC products had relatively high gross margins, and due to tight pre-Q3 stocking conditions, we determined that it still had an impact on gross margin. In terms of expenses, the total sales, management, and R&D rates were 13.51%, an increase of 9.24 percentage points over the previous year, and financial expenses decreased by 3 million compared to the same period last year. As revenue grew rapidly, accounts receivable at the end of the third quarter were 324 million, an increase of 179 million over the end of the second quarter, and inventory at the end of the third quarter was 318 million, an increase of about 86 million over the end of the second quarter. We believe it was mainly for ETC product preparation in the fourth quarter, which also had an impact on current operating cash flow. The wireless communication field is rich in product reserves, providing momentum for continuous growth. The company expects net profit to be increased significantly throughout the year as the promotion of ETC policies intensifies. At the same time, the company relies on ETC chips to expand development in application fields such as path recognition, anti-congestion, and parking lot management, and is expected to achieve further breakthroughs in the field of intelligent transportation. In addition, the company is deeply involved in the field of wireless communication and has a rich product line. It is highly competitive in low-power circuit design. The low-power Bluetooth audio chips and WiFi+ Bluetooth integrated chips for TWS headsets are progressing smoothly, and are expected to expand in the future, providing momentum for continued growth. Considering the impact of tight stocking on the company's profit margin, the company's net profit for 19-21 was lowered to 3.4, 4.2 billion yuan, and 5.2 billion yuan. Corresponding to the current stock price (closing price on October 28, 2019) PE was 49.9 times, 39.7 times, and 32.5 times, maintaining the “prudent increase” rating! Risk warning: ETC promotion fell short of expectations; wearable device boom declined; Bluetooth product prices fell sharply.