Event Overview The company released the 2020 interim report performance forecast. In the first half of the year, it is expected to achieve net profit of 27.98.58 to 32.4866 million yuan, an increase of 25.18% to 45.31% over the previous year. Analysis and judgment: The pandemic has not stopped a significant increase in performance. The upward trend in bank IT prosperity continues to verify that the company's 2020 H1 performance is expected to increase by 25.18% - 45.31%, further verifying the upward logic of industry prosperity. Although the epidemic in the first half of the year affected the company's software industry and integrated business to a certain extent, benefiting from the booming demand for IT upgrades from banks, the company is still very optimistic about new orders. There are three main factors supporting the prosperity of the industry: 1) The wave of bank distributed core system upgrades is starting, and the core system transformation is driving the six major peripheral systems to follow up with supporting reforms, with a total increase of more than 50 billion dollars. Gradual release has begun in 2020; 2) In the context of the Sino-US game, autonomy and control have become a major trend, and financial innovation is driving strong, further driving domestic replacement demand; 3) Bank IT (hardware) investment cycle is 4-7 years. Seven years have passed since the last round of economic downturn in 2013. points. In addition to this, considering the active output of China Construction Bank and Jianxin Financial Technology, which have close relationships with the company, in this new round of bank IT cycle, it is determined that the company has received a significant increase in business that is superior to the industry, and its performance has also been clearly boosted. The upward logic of the bank IT boom remains clear, and it is expected that the company's fundamentals will continue to exceed expectations throughout the year. The cost side is expected to continue to be optimized. R&D continued to increase the company's cost side performance in 2019 and exceeded expectations. Annual sales expenses and management expenses fell by 31.57% and 10.45% year-on-year respectively, mainly due to structural adjustments, sales team optimization, and cost control. At the same time, financial expenses were 27 million yuan, down 16.80% year on year, mainly due to financing restructuring and enhanced cash management. Looking at 2020H1, the impact of the pandemic has put pressure on Q1 revenue, highlighting rigid spending on the cost side. However, with the full resumption of work and production in Q2, profit side elasticity in the first half of the year exceeded expectations, judging that the trend of cost side optimization continues. Corresponding to the decline in three fees, the company's R&D investment continued to rise. In 2019, R&D expenses increased sharply by 29.14% year on year. R&D results include the development of new credit business systems (already applied to the Postbank, etc.), core business system optimization (where the data migration platform has been applied to CDB, etc.), and Ruimin Pass (already applied to Pudong Development Bank, etc.). It is expected that some new products will gradually achieve performance in 2020H1. In addition, the company expects to implement private stock issuance in the second half of the year, raising a total of about 45,0025,700 yuan, mainly for developing intelligent financial solutions based on distributed architecture, which will further deepen the technical and product advantages of financial IT. Digital currency benefits are expected to participate in bank-side system transformation. 2020 is not only the starting point of a new round of bank IT investment boom cycle, but also the foundation year for central bank digital currency (DCEP). Bank IT system transformation requirements brought about by DCEP will bring transformative opportunities to the industry. In “Digital Currency Overview: Space and Framework Based on Banknote Substitution”, we believe that DCEP will mainly bring huge IT transformation and operation requirements in three fields: central bank side, bank side, and public side. However, the bank-side system is the focus of the transformation of the digital currency ecosystem. It is expected to be a conditional tender. For qualified bank IT service providers, the open market is huge. It is estimated that the corresponding space for bank-side IT systems is expected to reach 93.6 billion yuan/year, and leading bank IT manufacturers are expected to stand out. We believe that as a first-tier competitor in the industry, the company also has a large number of medium and large high-quality bank customers, and is still expected to participate deeply in the bank-side business brought about by digital currency in the future (such as core system interface transformation, etc.) and share the dividends of technological change in the industry. The investment recommendation profit forecast remains unchanged. The company's revenue is expected to achieve a year-on-year increase of 27.2%/24.0%/22.5% in 2020-2022; net profit growth of 36.4%/29.4%/27.2% in 2020-2022 is expected. Net profit is estimated at 1.82/2.36/300 million yuan in 2020-2022, respectively, and the corresponding EPS is 0.41/0.53/0.67 yuan, respectively. The company is a bank IT manufacturer that has grown rapidly in recent years and has strong comprehensive strength. Considering factors such as rising bank IT investment sentiment, growth brought by large banks and technology subsidiaries, and continuous optimization on the cost side, the company's performance is expected to continue to grow at a high level throughout the year and maintain its “buy” rating. Risks suggest that competition in the industry has intensified, downstream banks' IT investment budgets have fluctuated beyond expectations, central bank digital currency implementation has progressed less than expected, and the progress of innovative business has fallen short of expectations.