Event: The first three quarters of 2020 achieved revenue of 176 million yuan, a year-on-year increase of 16.07%, net profit of 33.738 million yuan, net profit of 33.738 million yuan, net profit minus 42.6715 million yuan, and losses increased by 512.42% and 85.73% year-on-year respectively. Investment highlights Q3 revenue growth exceeded expectations, and contract liabilities increased year over year: Q3 in a single quarter achieved revenue of 64 million yuan, up 54.30% year on year, and continued high month-on-month growth (Q1 and Q2 respectively - 14.22% and 19.62%); net profit was 1,1643 million yuan, turning a loss into a win over the previous year; after deducting non-net profit - 3,5583 million yuan, loss decreased 83.70% year on year. Net profit continued to be lost in the first three quarters, mainly due to the increase in sales staff and high R&D investment. The overall gross margin for the third quarter was 65.29%, showing a sharp improvement over the previous month (Q1 and Q2 were 49.70% and 46.60%, respectively). On the cost ratio side, the sales expense ratio, management expense ratio, and R&D expense ratio for the first three quarters were 20.54%, 29.23%, and 32.48% respectively, compared to +4.44pct, -7.98pct, and 7.50pct, respectively. Contract liabilities (original advance accounts) for the first three quarters were 191 million yuan, an increase of 138.75% over the previous year, and also achieved significant growth over the previous year. The high growth in contract liabilities shows that the company has sufficient projects in hand. Since the overall PKI implementation cycle is short, and most government projects will complete project acceptance and revenue confirmation in Q4, we believe that the company's high growth trend will continue until Q4. Increase investment in R&D and focus on building the Xi'an R&D center: Since this year, the company's investment in R&D has increased markedly. On the one hand, it has increased investment in R&D capital. On the other hand, the company has strengthened the construction of the Xi'an R&D center around the R&D center at its Shanghai headquarters. Currently, the Xi'an R&D center has a R&D team of more than 60 people, and plans to form an R&D center with more than 200 people by 2023. Among the “China's Top 100 Cybersecurity Capabilities” companies published by World Consulting this year, GEL Software was selected as a leading company. Cybersecurity is an industry that requires continuous technological innovation. While steadily advancing business development in advantageous fields such as the party, government, military, and enterprise, the company is carrying out the top-level layout and planning of a trusted identity authentication system in an orderly manner, building a market plan for an autonomous and controllable product system, and gradually strengthening its market expansion in intelligent IoT and the construction of a PKI-based video security system. At the same time, we will further expand the field of zero trust and promote the implementation of zero trust pilot projects. Increase investment in security product development such as cloud computing, Internet of Things, mobile Internet, industrial Internet, etc., and business interface with customer groups. All of these investments will effectively enhance the company's competitiveness, thereby driving continuous expansion of scale. Profit forecast and investment rating: The company's net profit for 2020-2022 is estimated to be 104 million yuan, 154 million yuan, and 204 million yuan respectively, corresponding to PE of 50/34/26 times. Demand from downstream industries in the PKI field is expected to continue to explode. They are optimistic about the company's layout in new fields such as Internet of Vehicles, video security, and zero trust, and maintain a “buy” rating. Risk warning: The information security market fell short of expectations, and the construction of a secure cloud platform fell short of expectations.