The impact of the epidemic is limited, and operations have resumed steadily. The company's revenue and net profit have maintained steady growth in recent years. In the first half of 2020, companies affected by the epidemic achieved revenue of 223 million yuan, a year-on-year decrease of 2.33%; as the epidemic situation gradually stabilized and customer demand gradually rebounded, revenue in the second quarter increased 6.71% compared to the same period last year, while continuing to increase investment in product development and marketing system construction. As the domestic epidemic develops well and is affected by the seasonal distribution of orders in the cybersecurity industry, the company's revenue and profit situation is expected to rise steadily in the second half of the year. Empowering the transformation from compliance and risk management to digital transformation, China's information security market has huge potential, and demand escalation is expected to drive an increase in industry concentration. With the implementation of the Level Protection 2.0 standard, enterprises and institutions will further increase their investment in information security products and services. In 2018, China's information security market was 49.52 billion yuan. CCID predicts that China's network information security market will reach 92.68 billion yuan by 2021. According to the Ministry of Industry and Information Technology's website “Guiding Opinions on Promoting the Development of the Cybersecurity Industry (Draft for Comments)”, the scale of the cybersecurity industry will exceed 200 billion by 2025. It is still a probable event that a growth rate of 20% or more will be maintained over the next five years. At the same time, cybersecurity requirements have gradually evolved and upgraded from a single information security product requirement to a solution requirement where security products, security integration, and security services are intertwined. The trend of security services requires more comprehensive integrated service capabilities and complete and reliable security solutions, raising the competitive threshold for the industry, and the concentration of the safety market is expected to increase. The company is a leading manufacturer of technological innovation in the domestic cybersecurity industry. Compared with similar products from major domestic and foreign security vendors, the company's equipment ranks high in the market in terms of maximum throughput, number of new connections, and number of concurrent connections, and has advanced advantages in certain technology and performance. For five consecutive years, the company has been selected for the “Enterprise Firewall Magic Quadrant” by Gartner, an authoritative international analysis agency, and the “Specific Domain Person” quadrant of the “UTM Magic Quadrant”, and the “Specific Field Person” quadrant of Gartner's “IDPS Magic Quadrant” for two consecutive years. Build a diversified product landscape and forward-looking cloud security. The company continues to expand product line categories based on solid technology accumulation. It was the first in the industry to launch a series of products with leading technology, from the next-generation firewall product line to intrusion detection and prevention system products, database audit products, security audit platform products, data security products, intranet security products, application delivery products, etc. At the same time, the company grasped the trend of security services and entered the field of cloud security earlier. The company's cloud computing security solutions can provide comprehensive protection for various cloud computing environments. The pure software NFV products are very easy to deploy in cloud computing environments. The diversified product layout is expected to greatly broaden the company's development prospects. Company profit forecast and investment rating: We expect the company's net profit of $1.15, 1.50 and $190 million respectively in 2020-2022, corresponding to EPS of $0.64, 0.83, and $1,05, respectively. The current stock price corresponds to the 2020-2022 PE value of 63, 49, and 38 times, respectively. Optimistic about the company's channel construction and product line expansion, coverage was given a “recommended” rating for the first time. Risk warning: Downstream customer information security investment falls short of expectations; policy implementation falls short of expectations; market competition increases risk.