Key investment matters: The company disclosed its 2019 annual report and 2020 quarterly report. In 2019, the company achieved revenue of 286 million yuan, an increase of 19.09% over the previous year; net profit of 79 million yuan was realized, an increase of 6.67% over the previous year. The company plans to distribute a cash dividend of 0.7 yuan (tax included) for every 10 shares, while transferring 2 shares to 2 shares for every 10 shares. In Q1 2020, the company achieved revenue of 42 million yuan, a year-on-year decrease of 25.33%, and realized net profit of 7.97 million yuan, a year-on-year decrease of 28.52%. Ping An's view: Revenue is growing steadily, and temperature detection products are starting to be released. In 2019, the company's revenue maintained steady growth. The consolidated gross margin and net profit margin were 69.58% and 26.87% respectively, down 2.46 and 3.90 percentage points from the previous year: 1) The overall performance of pressure testing products was steady. In 2019, pressure testing products achieved revenue of 244 million yuan, an increase of 16.60% over the previous year. Among them, intelligent pressure generators, pressure calibrators, digital precision pressure gauges, and pressure calibrators achieved revenue of 83.93 million yuan, 50,92 million yuan, 54.33 million yuan, and 27.02 million yuan respectively, up 11.78%, 12.36%, 18.67%, and 16.66% over the previous year. 2) The temperature detection product begins to be released. In 2019, the company's temperature detection products achieved revenue of 38.52 million yuan, an increase of 39.34% over the previous year. On the one hand, thanks to the company's increased investment in temperature testing products, the four series of new temperature detection products developed over the years were launched one after another after 2018; on the other hand, the upgraded temperature and humidity testing products of the subsidiary Changfeng Zhiyuan quickly enriched the company's product line. 3) The company's profitability declined in 2019, mainly because products exported to the US were affected by tariffs, and gross margin decreased. In 2019, the gross margin of the domestic market and the foreign market was 70.46% and 68.22% respectively, down 0.29 and 5.90 percentage points from the previous year, respectively. The gross margin of the foreign market declined markedly. 4) Overseas markets withstood the pressure and achieved good growth. In 2019, the company's main business, the domestic market and overseas markets achieved revenue of 170 million yuan and 113 million yuan respectively, with an increase of 14.35% and 22.73% respectively. The growth rate of overseas markets was higher than that of the domestic market. In 2019, against the backdrop of trade disputes between China and the US and the downturn in the global economy, the company withstood pressure, actively adjusted its business strategy, and matched dynamic supply and demand, and achieved good growth in overseas markets. Affected by the pandemic, the company's performance declined in Q1 2020. In Q1 2020, domestic market revenue fell 45.6% year on year, mainly affected by the COVID-19 pandemic; overseas market revenue increased 6.8% year on year. On the one hand, this was related to restrictions on domestic production, and on the other hand, to the increase in US tariffs. As the domestic epidemic improved and the company actively adjusted its export strategy, the company's orders recovered rapidly in March. Investment advice: In view of the impact of the epidemic, we have lowered the company's profit forecast. It is estimated that the company will achieve net profit of 86 million yuan, 107 million yuan, and 131 million yuan respectively in 2020-2022 (pre-20/21 values were 108 million yuan and 141 million yuan), and the corresponding price-earnings ratios are 27 times, 22 times, and 18 times, respectively. As the invisible champion of domestic pressure detection and temperature calibration equipment, the company's performance has maintained steady growth over the years, maintaining a “recommended” rating. Risk warning: (1) The risk that the global pandemic will increase. If the global COVID-19 pandemic continues to worsen, it will have an impact on global economic production and affect the company's performance. (2) Trade friction between China and the US has intensified. If trade friction between China and the US intensifies and the number of products subject to high tariffs increases, the company's overseas markets will face greater uncertainty. (3) Risk of weakening downstream demand. If overall industrial investment declines and demand for pressure testing and temperature calibration products falls in the power, petroleum, chemical, metering and other industries, the company's performance growth will be affected. 4) Competition in the industry increases risk. If overseas giants increase their investment in the market, competition in the industry will intensify, and the company's revenue and gross margin will be under pressure. 5) The risk of MEMS pressure sensor production falling short of expectations. If the company's aggressive MEMS pressure sensor production plan falls short of expectations, it will affect the company's medium- to long-term development.