The 1-3Q19 performance is basically in line with our expectations for 1-3Q19 revenue of 620 million yuan, an increase of 7.23%, and net profit of 60 million yuan, a decrease of 30%; of these, 3Q19 revenue was 240 million yuan, an increase of 4.5%, and net profit of 21 million yuan, a decrease of 56.5%. 3Q19 gross margin was 35.4% (excluding taxes and surcharges), down 15.5ppt from 2Q19. We believe that the year-on-year decline in quarterly results was mainly due to the quarterly impact of software business settlement, resulting in quarterly fluctuations in gross margin and net margin. The 3Q19 results were basically in line with our expectations. The company's annual performance was 115-138 million yuan, an increase of 50-80%. The net profit corresponding to 4Q19 reached 0.53 to 76 million yuan, an increase of 147% to 256% over the previous month, and growth is expected to reach an inflection point. The company believes that the acceleration of 5G base station and IDC construction and ubiquitous power Internet of Things will drive high performance growth in 4Q19. Our previous estimate of the company's annual results was 137 million yuan, which is below the upper limit of the range. The year-round guidance is in line with our expectations. We believe that revenue growth is weak due to delays in the completion of HVDC orders for the company's data center and the 5G base station construction is still climbing. The cost rate increased slightly year-on-year, mainly due to a 1ppt increase in R&D expenses and a decrease in sales expenses. The net interest rate for 1-3Q19 is 10%, and there is some fluctuation between quarters. Development trends We are optimistic about the demand for communication power supplies at the beginning of 5G base station construction and the increase in orders brought about by the company's technology accumulation in the HVDC power supply field. In the HVDC field, the company has collaborated with Ali to innovatively develop the data center power supply scheme Panama System 1 to further promote IDC power system efficiency and reduce overall loss. The company believes that it is expected that the penetration rate will be further increased with this product. At the same time, we believe that the 5G base station construction, which began on a large scale in 2020, is beneficial to the company's communication power system and will jointly push the company's revenue to a new level. Charging piles have entered leading customers, and Cloud Energy is ubiquitous in the Internet of Things. The company exclusively won the bid for State Grid Evergrande and entered the community charging pile market. At the same time, it is already the main charging pile supplier for Didi Xiaoju, and continues to grow with major customers. The cloud energy company launched the transfer of energy consumption data from about 7,000 industrial enterprises in Linhai City to the cloud, and believes that it is expected to create a replicable model for ubiquitous power IoT and integrated energy, accelerate promotion, expand scale, and gradually reverse losses. Profit forecast and valuation We maintain our net profit target of 137/214 million yuan in 2019/2020. The current stock price corresponds to 50x/32x price-earnings ratio in 2019/2020. Maintaining an industry rating and a target price of 13.80 yuan, corresponding to 56.9 times the 2019 price-earnings ratio and 36.4 times the 2020 price-earnings ratio, there is 13.5% upside compared to the current stock price. Risk IDC's order completion rate fell far short of expectations, and 5G communication base station power supply orders fell short of expectations.