Incidents: The company recently released its annual report and first quarter report. The company's 2019 revenue reached 689 million yuan, up 3.77% year on year, net profit of the mother reached 808.7 million yuan, down 5.17% year on year. The company's revenue for the first quarter of 2020 reached 164 million yuan, down 10.12% year on year, and net profit reached 22 million yuan, up 35.69% year on year. Comment: The company is a leading panel module equipment company, and its performance has maintained a good growth trend. The company is mainly engaged in R&D, production, sales and service of automated module assembly equipment for flat panel displays. The company has set up eight major divisions accordingly, including bonding division, lamination division, offset division, inspection division, large TV division and mobile terminal division, general division and semiconductor division. The main products include bonding equipment, bonding equipment, parsing equipment, testing equipment, large size TV line equipment and mobile terminal automation equipment, etc. Customers include many well-known domestic enterprise customers such as Foxconn, Huawei, BOE, and Lansi Technology. In 2019, the company's net profit remained basically stable. In the first quarter of 2020, net profit increased compared to the same period of the previous year due to a sharp increase in VAT refunds received compared to the same period last year. The company's gross margins in 2019 and 2020Q1 were 34.37% (+0.13pct) and 28.54% (year-on-year -0.9pct), respectively, which remained stable. The investment in OLED modules is getting better. The company closely revolves around the panel industry, forming a strong position in the industry. It is expected that the relevant orders will continue to be implemented. The future will clearly benefit from the expansion of the panel industry, especially OLED panels. In recent years, Chinese manufacturers such as Jingdong, Tianma, and Huaxing Optoelectronics have increased the OLED field. We expect the industry to have plans to expand production of close to 150-200 OLED module lines in the next 2 years, and the overall market is expected to reach 30 billion yuan. According to the company's current business scale, there is still a lot of room for development. Automotive electronics, large sizes, semiconductors, etc. are going hand in hand. The company obtained the supplier qualification of Continental Group and entered its supply chain system in 2019, receiving a total of 704.7 million yuan of orders. This is the result of the company's continuous accumulation and gradual results in technology, products, and market expansion in recent years. The company has entered a new field of automotive electronics applications with broad market space, helping to further expand the application fields and scope of the company's product line. Founded in 1871, Continental Group is a multinational enterprise group with a century-old history. It is one of the world's top 500 suppliers of automotive accessories. In order to maintain the company's R&D innovation advantages, the company continues to increase the reserve of R&D technical talents. In 2019, the company's R&D investment reached 67 million yuan, an increase of 17.35% over the previous year. In addition to maintaining the existing market for small to medium size equipment modules, the company is developing large-scale module bonding equipment and expanding the entire TV module line in terms of large-scale R&D, providing the company with an opportunity to enter a larger market, forming a competitive product advantage, and becoming a new profit growth point for the company. At the same time, the company has also gradually entered the semiconductor field and has completed the development of semiconductor inverting equipment, which has steadily paved the way for the company's future development and firmly consolidated the foundation for the company's long-term development. Domestic substitution is expected to continue to break through. Profitability forecasts and valuations. We believe that the company's strategy is clear. In recent years, we have continuously invested in R&D to respond to changes in market demand, and are firmly optimistic about the company's future development. We expect the company's net profit attributable to shareholders of the parent company in 20-21 to be 153 million and 235 million, respectively, and EPS of 1.06 and 1.63 respectively, with corresponding valuations of 27 and 18 times, maintaining the buying rating. Risk warning: OLED production lines and large LCD production capacity have not progressed as expected, and the equipment import replacement rate has fallen short of expectations.