Leading yachts were converted to military electronics, and the sunbirds spread their wings and flew. Since its establishment in 2003, the company has mainly been committed to the design, development, production, sales and service of high-performance composite boats. In 2017, the company issued shares to acquire 97.38% of the shares of Chengdu Yaguang Electronics Co., Ltd. and entered the field of military electronics. After Yaguang Electronics merged, the company's stock abbreviation was changed from “Sunbird” to “Yaguang Technology.” In a situation where demand in the boat market is weak, the military electronics business has become the main contributor to revenue and profit, and the company's overall profitability has improved markedly. In the first tier of microwave components, the “two firms and one factory” pattern is stable. Yaguang Electronics is the first batch of key enterprises developing and producing microwave circuits and devices in China. It is also the main manufacturer of microwave circuits for military use in China. Its main products are widely used in shipborne, terrestrial, space-borne, airborne, and missile-borne platforms, as well as in various fields such as radar, microwave communications, electronic countermeasures, satellite communications, manned spacecraft, and lunar exploration projects. Since its establishment, Yaguang Electronics has been committed to the research and development of microwave technology and products. It has made great achievements in cutting-edge microwave circuit technology fields such as LTCC, MCM, SIP, SOC, and MEMS. It has always been at the forefront of the domestic military radio frequency microwave field, and is known as “two companies and one factory” along with CLP 13 and 55. Benefiting from the construction of national defense informatization, 5G opens up more room for growth. Microwave components have dual-use properties, but since military radar, communication, and electronic warfare require high transmission power, civilian communications, and civil communications are generally in a lower operating frequency band, there are differences in material selection and technical routes for military and civilian microwave components. As military microwave components gradually develop into lower costs and miniaturization, and 5G communication expands to higher frequency bands, the degree of civil-military integration of microwave components is expected to continue to increase. Yaguang Electronics is actively deploying the 5G communication field. In 2017, millimeter wave power amplifiers for 5G communication were successfully developed, and GaN power amplifiers were mass-produced in small batches. As 5G construction enters its peak period, it will open up more room for growth for the company. Profit forecast and investment rating: The company's net profit for 2019-2021 is expected to be 256 million yuan, 325 million yuan, and 399 million yuan, EPS is 0.25 yuan, 0.32 yuan, and 0.40 yuan, corresponding PE is 30 times, 24 times, and 19 times, maintaining the “buy” rating. Risk warning: military orders fall short of expectations; boat market demand continues to be sluggish