The company issued an annual report, which is in line with expectations. In 2019, the company achieved total operating income of 988 million yuan, an increase of 43.70% over the same period last year; net profit attributable to shareholders of listed companies was 191 million yuan, an increase of 95.65% over the same period last year. We published a report predicting that the company's net profit in 2019 was 190 million yuan, with a forecast deviation of -0.5%. NB-IoT smart water meters are driving the company's growth to accelerate. Benefiting from policy impetus, industry demand, and technical maturity, NB-IoT smart water meters have begun to be released. The company's share of smart meter sales revenue continues to increase. In 2019, smart watch revenue reached 600 million yuan, an increase of 90.97% over the previous year; the revenue share increased from 45.72% in 2018 to 60.75%. In 2019, the gross profit of smart water meters reached 260 million yuan, an increase of 103.36% over the previous year, and the gross profit share reached 70.15%. Smart water meters became the most important source of performance and growth, driving the overall gross margin to 37.58% from 33.91% in 2018. The company's total sales volume was 8.5845 million units, an increase of 17.09% over the previous year. The core competency lies in R&D innovation and marketing networks. The company is one of the first companies in China to cooperate with Huawei to develop, produce and promote NB-IoT 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 at or above the county level across the country, and the customer coverage rate has reached about 40%. In 2019, the company's main customers gradually moved from county and municipal water departments to mainstream first-tier cities such as Beijing, Shanghai, Tianjin, and Shenzhen. In the 2019 Tianjin Smart Water Service tender, the company won the bid for more than 1 million units, with a winning share of more than half. Sales expenses in 2019 were close to 100 million yuan, a year-on-year increase of 43.70%. The company continuously improves non-magnetic sampling technology, realizes product serialization of NB-IoT IoT water meters and wireless remote water meters based on LoRa communication technology, increases the development of ultrasonic water meters, electromagnetic water meters, and direct drinking water meters, and accelerates the promotion and application of stainless steel water meters, dry water meters, and volumetric water meters; in terms of smart water big data service system and platform construction, based on the large volume and high-quality flow data of NB-IoT water meters, improving digital water supply, intelligent control, real-time monitoring and water and IoT functions centered on DMA zonal measurement management, etc. Digitalization, informatization and intelligence of water supply management. Profit forecast: The company is expected to return net profit from 2020 to 2022. EPS is 0.25, 0.31, and 0.39 yuan, and PE is 20.19, 16.45, and 12.80 times. The buying rating was maintained, 30 times PE in 2020, the target price was raised to 7.5 yuan, and the stock price space was 48.5%. Risk warning: Systemic risk; risk of fluctuations in raw material prices.