Incidentally, on October 9, the company released its third quarter report. The company achieved net profit of 1,277 million yuan in the first three quarters, an increase of 28.20% over the previous year; the company achieved net profit of 528 million yuan in the third quarter, an increase of 6.92% over the second quarter. The price of building materials reached a new high in the third quarter, and the company's profit continued to expand. Since the third quarter, market demand has gradually improved, and construction steel prices have continued to rise. At the same time, the company's overall operation has also been affected by the continuous rise in coke prices from the raw material side. According to Steel Union data, in the first three quarters of 2018, the average price of HRB 400:20 mm rebar in Shenyang was 3,962 yuan/ton, 3,834 yuan/ton, and 4,242 yuan/ton, respectively. The average sales price in the third quarter continued to rise compared to the second quarter, an increase of 10.65%. According to the company's semi-annual report data, the company produced 2.6933 million tons of crude steel in the first half of 2018, up 4.02% year on year. The price of building materials continued to rise, the company's profit continued to expand, and the company's operating data for the third quarter performed excellently. Production and operation continue to optimize operation quality and continue to improve, the company adheres to the principle of prioritizing efficiency, promotes transformation and upgrading, continuously optimizes the raw fuel structure of blast furnaces, optimizes production lines and product structures, improves marketing management, and strives to save iron and steel, and reduce costs and increase efficiency. During the reporting period, the company's sales period expense ratio was 3.52%, down 3.62% from the semi-annual report, and the net sales profit margin was 8.08%, which improved from 7.43% of the semi-annual report and 5.74% of the quarterly report. The company's production and operation continue to be optimized, and the quality of operation continues to improve. The geographical location shows advantages. Later profits can still be expected. Since the third quarter of this year, the government has clearly expanded the production limit area for the 2018 heating season from the “2+26” region last year to the Yangtze River Delta and Fenwei Plain. The company is located at the junction of the three provinces of Liaoning, Hebei, and Inner Mongolia, and is not within the production limit area. On the one hand, the company's production and operation during the heating season is guaranteed; on the other hand, production limits in other regions will promote the stability of steel market prices to a certain extent and provide guarantees for profitable companies. Thanks to the company's excellent location, the company's production and operation situation in the fourth quarter is expected to continue, and profits can still be expected in the later stages. In addition, the company is located on a major transportation route connecting Northeast China and northern China, connecting eastern Inner Mongolia and even Mongolia and coastal ports. In the first half of this year, North Korea changed its economy from the pioneer army. As the main rod and wire production base in the province and even Northeast China, the company has advantages in variety and location, and is expected to directly benefit later. The company's operations were stable and maintained a purchase rating in the first three quarters of 2018. The company's business situation continued to improve, and profits continued to increase significantly over the same period. We expect the company's EPS to increase from 0.59 yuan, 0.66 yuan, and 0.67 yuan to 0.67 yuan, 0.77 yuan, and 0.79 yuan in 2018-2020. Based on the closing price on October 9, the PE corresponding to 2018-2020 was 5.25 times, 4.55 times, and 4.48 times, respectively, maintaining the purchase rating. . Risk warning: Changes in the relationship between China and North Korea, contraction in the company's net profit due to falling steel prices, changes in production due to production and maintenance of the company's equipment, and changes in operating costs due to the company's own management.