NB-IoT smart water meters are driving the company's growth acceleration. Benefiting from policy promotion, industry demand and technology maturity, NB-IoT smart water meters began to be launched. The company's share of smart watch sales revenue continues to increase. The share of smart watch revenue in the first half of 2019 increased from 46% in 2018 to 52%, and the gross profit share of smart water meters reached more than 65% in the first half of 2019, driving an increase in overall gross margin, becoming the most important source of performance and growth. Key customers won a large proportion of bids. In the 2019 Tianjin Smart Water Service tender, the company won more than 1 million units, and won more than half of the bid. The core competitiveness lies in R&D innovation and marketing networks. The company is one of the earliest domestic enterprises to cooperate with Huawei to develop, produce and promote NB-IoT IoT water meters. The development of NB-IoT smart water meters began in 2015. The company has established and maintained long-term and stable business relationships with about 1,400 water departments above the county level across the country, and the customer coverage rate has reached about 40%. In 2019, the company's main customers gradually entered mainstream first-tier cities such as Beijing, Shanghai, Tianjin, Shenzhen and other mainstream first-tier cities to strategically invest in Tianma and lay out the recycling of rare earth resources. In January 2019, the company subscribed to the private offering of Xitianma, a listed company on the Third Board, at a price of 4.45 yuan/share, holding 20% of the shares. Zhongxi Tianma became a joint venture of the company, with an overall valuation of 364 million yuan. In January 2020, Zhongxi Tianma once again privately issued shares, with an overall valuation of 487 million yuan, an increase of 33.8% over when the company participated in the issuance. Zhongxi Tianma is a high-tech enterprise engaged in the recycling, processing and contract processing of NdFeB waste. Its products include rare earth oxides such as neodymium oxide, neodymium oxide, oxidation pavers, oxidation error, oxidation error, and oxide shiji. Zhongxi Tianma's revenue and profit growth was steady. Performance forecast: The company's 2019-2021 operating income is expected to be 27% CAGR; net profit to mother is CAGR 48.5%. Due to the increase in the share of NBIOT smart water meters, the gross margin was much higher than that of mechanical water meters, and the return on investment increased steadily, and its net profit to mother grew faster than revenue growth. The 2019-2021 EPS is 0.18, 0.25, 0.31 yuan, corresponding to the current PE price of 27.72, 20.36, 16.43 times. Covered for the first time, giving a “buy rating”. Risk warning: Systemic risk, smart water meter orders fall short of expectations.