The interim report predicted a net profit increase of 10%-40%. The company released the 2019 interim report performance forecast: the first half of 2019 achieved net profit of 5747.43-73.1492 million yuan (YOY +10% to +40%); the net profit of the mother was 41,3702-57.451 million yuan (YOY -1% to +36%) in Q2 of 2019. In the first half of 2019, employee remuneration increased significantly year on year, and depreciation expenses increased year on year, driving the year-on-year increase in costs, but the profit from the increase in revenue outweighed the impact of increased costs on profit. The company's new energy business is growing rapidly. The share of the low-voltage electrical appliance business has stabilized the relative monopoly of the high-voltage electrical appliance testing market. The company's overall competitiveness ranks first, and the revenue of new energy laboratories and the like is growing rapidly along with the rapid development downstream. The low-voltage electrical testing market is mature, and the company's share is stable, which can provide stable cash flow. The gap in the revenue/depreciation growth rate in 2019 is expected to narrow. Performance will experience rapid growth due to the expansion of the company's size and the gradual transfer of fixed assets at the testing base under construction. Fixed assets are growing rapidly, and depreciation in operating costs has gradually increased, from 38.6% in 2011 to 66.1% in 2018. According to the construction plans and actual progress of the various projects under construction of the company, the company expects that most of the current project construction will be completed within 2020, and the company's depreciation expenses are expected to reach the highest value in 2021. After 2021, the company's depreciation expenses will show a trend of decreasing year by year as the depreciation period for some fixed assets ends. We believe that as the company strengthens internal assessment management, gradually develops business in non-East China regions, and the overall utilization rate gradually rises, starting in 2019, the scissor gap between the company's revenue growth rate and depreciation growth rate will be reduced or even corrected. The company will enter a stage where profit growth is faster than revenue growth, and performance is expected to grow rapidly. Maintaining a “highly recommended” rating company as a leading testing leader for high and low voltage electrical appliances and investing in additional laboratories is expected to usher in a period of performance release as projects under construction gradually improve and the company's production capacity utilization rate increases. We expect the company's net profit in 2019-2021 to be 1.81/2.40/329 million yuan, respectively, and the corresponding EPS is 0.24/0.32/0.43 yuan, respectively. The current stock prices are 26/19/14 times corresponding to 2019-2021, respectively. Maintain a “Highly Recommended” rating. Risk warning: Electrical appliance testing business expansion falls short of expectations, downstream industry prosperity falls short of expectations, and construction in progress falls short of expectations