A leader in the cultural lighting industry, based in the southwest and moving to the whole country. In recent years, as various regions have paid more attention to the city's landscape, street lights, as one of the most notable elements at night, have begun to become an important carrier of the city's culture and image. As an enterprise focusing on urban road lighting solutions, Huati Technology is in a leading position in the industry in planning and design, manufacturing, construction and operation. Not only are its products highly competitive in quality and price, but its design creativity is ingenious. It combines municipal lighting with local cultural elements, and its highly original and customized services are very popular. Based in the southwest, the company is making efforts to expand its market to major cities and attractions across the country, such as Chang'an Street in Beijing, Xinjiang, Shenzhen, Xi'an, Wuhan, Yantai, Changchun, etc. In the future, as the company receives orders in more and more cities, the performance is expected to rise. An important entrance to smart cities, street lights have been upgraded gorgeously. At a time when the urbanization process is accelerating and crowds are increasing, urban development is facing a series of problems such as road congestion, shortage of resources, and environmental deterioration. Smart cities refer to the use of the Internet of Things and big data technology to reshape and upgrade urban management. However, due to reasons such as network capacity and transmission speed, its development was difficult at one point. Now, as 5G construction unfolds, network bottlenecks will be solved, and smart city development will receive important impetus. According to Lightpole Intelligence data, as of the beginning of April 2020, the total number of smart city-related pilots determined by the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the National Bureau of Surveying, Mapping and Geographic Information, and the Development and Reform Commission had reached 749. As an important entrance to smart cities, smart street lights can be equipped with electronic devices such as networks, monitors, displays, and various sensors, which are equivalent to the “eyes, ears, and nose” that provide intelligence to the urban brain. Furthermore, in order to achieve the same coverage as 4G, the number of 5G base stations will increase dramatically. Repeated construction of a large number of base stations will not only waste resources, but also hinder visibility. Therefore, high-density smart street lights will be an important carrier for base station construction and are expected to usher in rapid development opportunities. According to data from the China Business Industry Research Institute, China's smart street light market exceeded 20 billion yuan in 2019, and is expected to exceed 100 billion yuan by 2022. Catalyzed by new infrastructure, local governments have increased smart street lights, and industry leaders have enjoyed the dividends. After the epidemic, in order to effectively promote economic development, new infrastructure represented by 5G has become an upstart in the industry. Catalyzed by this, major cities have stepped up their efforts to build smart street lights. Take Shenzhen as an example. On April 23, 2020, Futian District held the launch ceremony of the first batch of “New Infrastructure, New Consumption, New Technology, New Manufacturing” major projects in 2020 and the commencement ceremony of the Shenzhen Intelligent Manufacturing Center, with a total investment of 3.9 billion yuan for multi-purpose smart poles. In this context, Huati Technology, as an industry leader, has advantages in quality, service and cost performance, and has many successful samples. Its multi-functional smart light poles have been promoted and applied in more than 30 large and medium-sized cities across the country, including Xiong'an New Area, Shenzhen, Qingdao, Fuzhou, Wuhan, Changsha, and Chengdu, and is expected to benefit deeply from this feast. Early hardware installation took the lead, software operation progressed steadily in the later stages, and the smart city layout expanded from “body” to “brain”. In addition to installing smart street light hardware, the company is also actively developing software businesses related to smart city operation and management, such as cooperating deeply with Tencent and Donghua in the Tianfu Greenway Project in Chengdu to jointly provide services such as public cloud platform systems, network security, and big data platform systems. As this project progresses, the company can participate deeply in the construction and post-operation of the smart city “brain”, not only broadening business boundaries, but also accumulating valuable experience for the subsequent construction of other smart city projects. Profit forecast and investment rating: First coverage, giving a buy rating. Benefiting from new infrastructure catalysis in the post-pandemic era, China's smart light pole construction has already begun. In the short term, the company will be the first to benefit as an industry leader; in the long term, in the smart city construction process, the upgrade from hardware to software, from “body” to “brain”, is Huati Technology's most anticipated business upgrade. The company is expected to achieve net profit of 1.63, 3.11, and 410 million dollars in 2020-2022. The current market value corresponds to PE 29.20, 15.31, and 11.64 times PE, which is covered for the first time, giving the company a purchase rating. Risk warning: 1) Downstream demand falls short of expectations; 2) Implementation of new infrastructure falls short of expectations; 3) Market competition intensifies.