Net profit withheld from the interim report increased by 34%. The company released the 2019 interim report: 2019H1 achieved revenue of 367 million yuan (YOY +12%); realized net profit of 68 million yuan (YOY +30%), which was in the middle of the interim report performance forecast of 0.57 to 73 million yuan; achieved net profit of 62 million yuan (YOY +34%); in 2019, Q2 achieved net profit of 52 million yuan (YOY +23%). The gross margin of 2019H1 company was 49.47% (YOY+1.51pct), of which the 2019Q1/Q2 gross margin was 42.78%/54.34%, respectively. The Q2 gross margin increased significantly, mainly due to the increase in the company's overall capacity utilization rate. The employee compensation of 2019H1 company was 80 million yuan (YOY +19%) and depreciation expenses were 136 million yuan (YOY +4%), which led to a year-on-year increase in costs, but the profit brought by the increase in revenue outweighed the impact of the increase in costs on profit. Emerging businesses such as new energy are developing rapidly, and advance payments are in a high position to ensure future performance growth. The competitiveness of the company's high-voltage electrical appliance testing market ranks first. Revenue from emerging businesses such as new energy develops rapidly downstream and grows rapidly; the low-voltage appliance testing market is mature, and the company's share is stable, which can provide stable cash flow. 2019H1, the company achieved inspection revenue of high voltage electrical appliances of 286 million yuan (YOY +13%), low voltage electrical inspection revenue of 61 million yuan (YOY +1%), and environmental inspection revenue of 018 million yuan (YOY +38%). In recent years, the company's testing capacity has continued to improve, testing programs have continued to expand and enrich, the company's qualifications have continued to expand, and continue to receive international recognition. Advance payments reached 104 million yuan at the end of June 2019, which is significantly higher than the same period in 2018, and the company's future performance growth is guaranteed. In the transformation from high investment to high growth, it is expected that a period of performance release will be ushered in. The company expects that most of the current project construction will be completed within 2020, and depreciation expenses are expected to reach the highest value in 2021. 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 the “Highly Recommended” rating company as the leading testing leader for high and low voltage electrical appliances, investing heavily 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: The expansion of the electrical appliance testing business falls short of expectations, and the prosperity of the downstream industry falls short of expectations