Event: the company released a third-quarter report that the company's operating income in the first three quarters was 521 million yuan, an increase of 70.94% over the same period last year, and the net profit belonging to shareholders of listed companies was 61.2 million yuan, an increase of 82.32% over the same period last year.

The performance exceeded expectations and Anke drove sustained high revenue growth. The company's operating income in the first three quarters was 521 million yuan, an increase of 70.94% over the same period last year, and its net profit was 61.2 million yuan, an increase of 82.32% over the same period last year. In the third quarter alone, the income was 224 million yuan, an increase of 106% over the same period last year, and the net profit was 34.09 million yuan, an increase of 269% over the same period last year. Both income and profit growth exceeded expectations. The company's 2019Q3 gross profit margin was 66.83%, down 12.97pct from the same period last year, mainly due to the increase in the proportion of the company's integrated revenue; the net profit rate was 11.62%, up 0.74pct from the same period last year, and the company's profitability was improved. The localization of the company and the high bearing of the independent controllable product market drive the rapid growth of the company's operating income and the improvement of profitability, and the net profit belonging to the shareholders of the listed company has increased significantly compared with the same period last year. The company's 2019Q3 accounts receivable was 1.155 billion yuan, an increase of 34.62% over the same period last year. We believe that as the company strengthens its work on receivables and strengthens the control of accounts receivable, superimposed to G industry returns are concentrated in the fourth quarter, and the situation of accounts receivable for the whole year is expected to improve.

Application software has become the key to the industrialization of Anke, and Xinyuan Doudou has joined hands with Huawei to accelerate its promotion. Under the catalysis of policy, technology and market, the progress of Anke is very obvious, and the market space of Anke-related software and hardware products and services is expected to reach the trillion level. At the same time, domestic application software has become the key to the ecological construction of domestic operating system. The company signed a strategic cooperation agreement with Dingqiao Communication to accelerate the channel promotion of domestic security products represented by Xinyuan Doudou, which is expected to be promoted on a large scale in the party, government and military, large-scale enterprises and overseas areas.

Investment suggestion: under the catalysis of policy, technology and market, Anke ushered in the policy landing, and a number of products of the company were shortlisted in the "Purchasing list". At the same time, the company's source Doudou was applied in the government, finance and other fields. It is estimated that the company's revenue from 2019 to 2021 will be 739, 920, 1.87 million, respectively, and its net profit will be 2.08, 315, and 486 million, respectively, maintaining its "buy" rating.

Risk tips: increased competition in the industry; government investment in security information products is not as expected; Xinyuan Doudou promotion is not as expected; key assumptions may have the risk of errors.