Profit in 2019 was in line with expectations. The company's 2019 operating income was 3.671 billion yuan, YOY -30%; net profit of 111 million yuan, YOY -56.83%; net profit after deducting non-return net profit of 68 million yuan, YOY -63.41%. The company's profit is in line with our expectations. The contraction of business led to a decline in revenue, and non-recurring profit and loss affected net profit. 1) In 2019, the company shrunk business scale that lacked core competitiveness: public safety product revenue was 794 million yuan, a year-on-year decrease of 43.72%, and the share of total revenue fell from 26.90% to 21.64%; energy system products had no revenue throughout the year; 2) Subsidiary Bowei Changan received compensation for plant demolition last year, affecting asset disposal income of about 54 million yuan. There was no such income during the reporting period, which had a certain impact on current profit. 3) After the new industrial park is put into use, fixed costs such as depreciation and amortization increase. Operating cash flow decreased by 42.64% year over year. The company's net operating cash flow in 2019 was $76 million, a decrease of 42.64% over the previous year, mainly due to the fact that capital outflows from the company's public safety operations were greater than inflows during the reporting period. Development Trend Company is a leading enterprise in the meteorology/air traffic control radar industry in China. In the radar industry, the company's main products include radar-related ancillary products such as weather radar, air traffic control radar, low altitude warning radar, and microwave components. It has a complete range of bands and a high market share. The company continues to increase investment in R&D and continuously improve scientific research management and intellectual property management systems. By the end of 2019, the cumulative number of valid patents had reached 581, of which 117 were invention patents, accounting for a significant increase. The company was successfully awarded the fourth batch of enterprises with intellectual property advantages in Anhui Province. The only listing platform owned by China Telecom Blog and Micro Group. The company issued an announcement on September 10, 2019. 38 of the company's shares in the company were transferred free of charge to China Telecom Bowei, and China Telecom Bowei directly holds 32.36% of the company's shares. The four research institutes (8 institutes/16 institutes/38 institutes/43 institutes) under China Telecom Bo and Weibo have outstanding comprehensive strength in the field of information technology. We believe that the company, as the only listing platform under China Telecom, will not rule out drawing on the Guorui Technology model, which also belongs to the China Telecom Group, in the future, and that there is a possibility of integrating relevant high-quality assets. Profit forecast and valuation. Based on the company's business restructuring and the impact of the epidemic on the company's resumption of work and delivery, we lowered the company's 2020 revenue -20% to 4.221 billion yuan, and the 2021 revenue -18% to 4.805 billion yuan. At the same time, due to business sector adjustments, the share of revenue from sectors with higher gross margins increased. We kept the company's 2020/21E net profit of 140 million yuan and 190 million yuan unchanged. The company's current stock price corresponds to 44/33x 2020/21e P/E. We maintain our outperform industry rating and target price of 54 yuan unchanged, corresponding to 45 times P/E in 2021, with a potential increase of 39%. The risk radar order fell short of expectations; there is uncertainty about the integration of China Telecom's micro-assets.