The company released a semi-annual performance forecast. It is expected to achieve net profit of 42 million to 48 million yuan in January-June, compared with a loss of 3.869 million yuan in the same period last year. Policies have driven significant growth in performance. Benefiting from the policy impact of the “Notice on Vigorously Promoting the Development and Application of ETC on Highways” issued by the General Office of the Ministry of Transport on May 21, 2019, the company received a sudden increase in sales orders, which led to a significant increase in revenue and gross sales profit confirmed in the second quarter compared to previous estimates, which ultimately led to an increase in net profit. After winning the Jiangsu ETC order, large-scale nationwide ETC bidding is expected to begin. The company recently announced that it has become the winning bidder for “Jiangsu Networked Expressway ETC gantry system and lane RSU antenna and control system equipment procurement project section 1 and bid section 2” of Jiangsu Expressway Network Operation and Management Co., Ltd. The total bid amount won this time was 277 million yuan, accounting for 45.86% of the company's audited revenue in 2018. The current ETC order in Jiangsu Province means that the impact of the policy on the order is beginning to show, and nationwide bidding is expected to begin. ETC policies are still being intensively catalyzed. At the beginning of June, the National Development and Reform Commission and the Ministry of Transport issued the “Implementation Plan for Accelerating the Application of Electronic No-Stop Express Toll Services on Highways”, stating that by the end of December 2019, the number of ETC users nationwide had exceeded 180 million, and the ETC toll gate was fully covered. ETC lanes became the main toll lanes, trucks achieved no-stop charges, and the express toll rate on highways reached more than 90%. All manual toll lanes supported electronic charging methods such as mobile payments, significantly improving the level of no-stop toll services on expressways. Investment advice: The company's EPS for 2019-2020 is expected to be 2.60 yuan and 2.74 yuan respectively, giving a buy-A rating, and a target price of 55 yuan for 6 months. Risk warning: ETC policy promotion is weaker than expected; industry competition is intensifying.