On April 25 of the incident, the company released its 2019 annual report, achieving operating income of 3.671 billion yuan, a year-on-year decrease of 30.03%, net profit of 111 million yuan, a year-on-year decrease of 56.83%, and net profit after deduction of 68 million yuan, a year-on-year decrease of 64.41%. On April 29, the company released its quarterly report for 2020. It achieved operating income of 150 million yuan, a year-on-year decrease of 50.02%, and realized net profit of 61 million yuan, compared to -58 million yuan for the same period last year. The scale of revenue restructuring has declined, and the radar business is recovering and performance growth can be expected. The company can be expected to achieve operating income of 3.671 billion yuan in 2019, a year-on-year decrease of 30.03%, net profit of 111 million yuan, a year-on-year decrease of 56.83%, and net profit after deduction of 68 million yuan, a year-on-year decrease of 64.41%. Among them, revenue from radar and ancillary products was 1,964 million yuan, down 6.05% year on year; revenue from public safety products was 794 million yuan, down 43.72% year on year; power product revenue was 568 million yuan, up 4.75% year on year; mobile security equipment revenue was 233 million yuan, down 67.89% year on year; grain storage informatization revenue was 105 million yuan, down 50.17% year on year; and energy system products had no revenue during the reporting period. During the reporting period, the company actively shrank the scale of business that lacked core competitiveness. Due to the revenue restructuring period, the revenue of public safety business and energy system business decreased compared to the same period of the previous year; Bowei Changan received compensation for factory demolition in 2018, which affected the previous year's asset disposal income of about 54 million yuan. At the same time, the scale of revenue decreased, leading to a decrease in profits; after the company's new industrial park was put into use, fixed costs such as depreciation and amortization increased. The company's gross sales margin in 2019 was 18.38%, up 3.43 percentage points from 2018. The gross sales margin for the first quarter of 2020 was 30.69%, an increase of 13.06 percentage points over the same period last year. After the revenue structure was adjusted, radar and ancillary products increased their share of revenue, significantly increasing the company's overall product gross margin level. During the reporting period, the company obtained contract orders for multiple sets of comprehensive meteorological detection systems through factory inspection, weather radar data pre-processing, and phase II quality control subsystem software; won the bid for the military aviation management radar environmental control project and multiple civil aviation complete aircraft orders; microwave component products broke through bottlenecks in the micro-assembly packaging process, solidified the production process and obtained batch orders; and the implementation plan for the two-type warning radar position modification project passed the review. The company's advance accounts at the end of 2019 were 326 million yuan, an increase of 33.45% over the previous year, and contract liabilities at the end of the first quarter of 2020 were 381 million yuan, mainly due to the increase in advance payments received from customers for radar and supporting services during the reporting period according to contract agreements. We believe that after the revenue structure is adjusted, the company's profitability will increase significantly, and at the same time, the recovery in orders for radar and ancillary products will provide impetus for the recovery in the company's performance. Equity transfers have been implemented. The value of the capital operation platform highlights the implementation of equity transfers, and the three-tier organizational model is gradually improving. In November 2017, China Telecom Group agreed in principle to form China Telecom Bowei Group, and transferred all state-owned shares of Sichuang Electronics held by 38 to China Telecom Microelectronics; in September 2018, China Telecom Bowei Group completed industrial and commercial registration; on September 3, 2019, China Telecom approved the free transfer of state-owned shares within the group company; on September 10, 2019, the company issued an announcement stating that the 38th Institute had signed a “Free Transfer Agreement on State-owned Equity” with China Telecom Weibo, 45.67% of the companies held by 38 All state-owned shares are unpaid Transfer to the ownership of China Telecom Blog and Weibo. The status of China Telecom Weizi Group as a listed platform is prominent, and expectations for capital operation are strong. The institutes affiliated with CLP Telecom Bowei Group include 8, 16, 38, and 43 institutes. The 4 hospitals have strong technical reserves and comprehensive capabilities in the fields of optical fiber cables, superconducting electronics, radar, microsystems and components, etc. 38 of these institutes are currently one of the most technologically advanced research institutes in the field of radar in China, and have the ability to develop and produce various types of radars for various platforms such as shipborne, vehicle, and airborne platforms. After the equity transfer was completed, the company's position as a capital operation platform for the China Telecom Weizi Group became more prominent. Due to the low level of asset confidentiality of the Department of Electronic Science and Technology, future asset injection expectations are strong. Profit forecasting and investment suggestions: The value of the capital operation platform is prominent, there is room for future asset injection, and there is room for future asset injection. As the leader in the domestic radar industry, weather radar, air traffic control radar and warning radar products occupy a certain market share in the military and civilian market, the radar business is expected to gradually pick up and improve in the future; as China Telecom's micro-capital operation platform, the company may benefit from the continuous restructuring of research institutes, and there is room for future asset injection. The company's net profit from 2020 to 2022 is estimated to be 140 million yuan, 180 million yuan, and 233 million yuan respectively, with year-on-year increases of 25.68%, 28.97%, and 29.68% respectively. The corresponding EPS from 2020 to 2022 was 0.88, 1.13, and 1.47 yuan respectively, corresponding to the current stock price PE, 49, 38, and 29 times, respectively, maintaining an increase in holdings ratings.