Guide to this report: Due to the contraction of non-core business, Sichuang Electronics' 2019 performance fell short of expectations; however, we believe that the company's radar business is improving, and its external assets are large and of high quality, and will benefit from the acceleration of military capital operations in the future. Key investment points: Maintain the target price of 60.13 yuan and increase holdings. The contraction of non-core business caused the 2019 performance of Sichuang Electronics to decline, which was lower than expected. We lowered the 2020-21 EPS to 0.96/1.26 yuan (originally: 2.29/2.71 yuan), and the 2022 EPS is expected to be 1.54 yuan. Considering that the company is a China Telecom micro-listing platform with large and high-quality external assets, future capital operations can be expected, we maintain the target price of 60.13 yuan. The contraction of non-core business led to a decline in performance and an increase in profitability. 1) The company's 2019 revenue was 3.67 billion yuan (-30%), net profit of 110 million yuan (-56.8%). The decline in performance was mainly due to the contraction of the scale of businesses that lacked core competitiveness. Among them, revenue from low-margin businesses such as public safety (-43.7%) and mobile security equipment (-67.9%) declined sharply, while the scale of the radar business (-6%) was relatively stable, and changes in the business structure were expected to result in a profit margin of +3.43 pp. The cost rate of +4.21pp is mainly due to a decline in revenue. It is expected that profitability will continue to increase after being profit-oriented ; At the same time, asset disposal income decreased by 54.15 million yuan. The reason is that Bowei Changan obtained a large amount of income from asset disposal in 2018. 2) Radar and ancillary businesses received an increase in advance payments from customers, resulting in prepayments of +33.5%, indicating that downstream demand was improving; net operating cash flow was -42.6%, mainly because the outflow of capital from public safety operations was greater than the inflow. A core domestic radar enterprise with both internal and external extension. 1) The company's radar includes meteorology, air traffic control, warning radar, etc. The market share is high, and the downstream trend is improving. 2) The company is the China Telecom blog and micro listing platform. The sum of the net profit of the four institutions outside the company is 4.7 times that of the company; since 2019, the frequency of asset securitization in the industry has accelerated markedly. At the same time, Guorui Technology's restructuring has progressed smoothly, and the company's capital operations can be expected in the future. Catalyst: The securitization of military assets accelerates. Risk warning: The military reform process has fallen short of expectations.