The performance of 19H1 slightly exceeded expectations, and the upward inflection point in profit was initially verified. 19H1 achieved revenue of 3.7 billion yuan, +11.5% year-on-year; net profit of 67.834 million yuan, +29.8% year-on-year (previous performance forecast +10% ~ +40%); net profit after deducting non-return net profit of 642.41 million yuan, +34.1% year-on-year, and performance slightly exceeded expectations (median forecast value). We believe that the high point of capital expenditure in '19 is about to enter a period of contraction, and high operating leverage is driving high profit growth. The 19 profit margin inflection point we proposed earlier was initially verified (19H1 profit margin +2.6 pct year-on-year), maintaining the profit forecast of EPS of 0.22/0.29/0.41 yuan in 19-21, maintaining the target price of 7.26-7.48 yuan/share, and maintaining “buying”. Performance was outstanding. The profit inflection point showed an upward inflection point of 19Q2 revenue of 210 million yuan (+11.9% yoy), net profit of 51.73 million (+23.5% yoy), gross profit margin of 54.3% (year-on-year flat +0.1pct/+11.6pct), revenue side growth was higher than cost side increase (+4.3% year over year due to depreciation expenses +4.3%, etc., in addition, employee remuneration +19%), and 19Q2 net profit margin reached 24.3% (+2.3 pc+13.9 pct month-on-month), An upward inflection point in profit margins is beginning to show. In order to increase market expansion and employee incentives, the company's 19H1 sales/management expenses were +26%/+18% year-on-year, but the company's control was still strong. The 19H1 three-fee (plus R&D expenses) rate was 27.8% (-1.8pct year-on-year), effectively promoting an increase in profit margins. The net operating cash flow of 19H1 was 260 million yuan (+24% year over year), and the payout ratio reached 111% (+13pct year over year), and the performance was still excellent. Low voltage demand is stable, and high voltage diversified growth 19H1. Revenue by sector: 1) Low voltage electrical appliance testing: revenue of 60.66 million yuan (+0.54% year-on-year, growth rate reversal is positive), revenue accounts for 16.6% (year-on-year -1.85pct), downstream demand for low voltage testing is relatively stable, and the incremental space comes from transmission and distribution grid construction and product upgrades. 2) High-voltage electrical testing: Revenue is 290 million yuan (+13%), maintaining rapid growth. It is mainly a non-funded 12kV DC test system project/EMC electromagnetic compatibility project/new energy test system project/electrical environment climate laboratory to carry out comprehensive testing services, contributing a total revenue of 500 million (+17% year-on-year), benefiting from UHV restart and new energy (photovoltaic) /automotive electronic and electrical testing demand. The company is currently actively developing the market. High voltage is expected to continue to grow steadily. Asset heavy attributes, high investment is expected to transform into high profit growth, and the electrical appliance testing industry is a typical asset-heavy industry. The company's high investment over the past few years has enabled its inspection capabilities in subfields to reach many world firsts. The increase in depreciation costs due to the implementation and consolidation of major projects has caused the company's net interest rate to fluctuate greatly, but EBITDA maintained a relatively rapid growth rate. CAGR reached 31% in 2016-2018, and the EBITDA profit margin increased from 56% to 66%. The profit margin in '18 fell 1.5pct to 18.1% year on year due to the consolidation of several projects at the end of '17, and the high point of capital expenditure in '19 has reached, and an inflection point in performance is beginning to show. According to the plan, most of the company's projects under construction are expected to be completed within 2020, and depreciation expenses are expected to reach the highest level of depreciation in 2021, so the company is expected to shift from high investment to high profit growth. Maintain the profit forecast, maintain the buy-rating company as the leader in the field of low pressure/high pressure testing, 19. The high point of capital expenditure has been reached, operating leverage has led to an increase in profit margins, and maintain the profit forecast of 19-21 EPS of 0.22/0.29/0.41 yuan. The current stock price corresponds to 27x/22x/15x P/E in 19-21. Referring to the average P/E34x valuation of comparable companies in '19, the target price is 7.26-7.48 yuan/share, maintaining the “buy” rating. Risk warning: Profit margins have increased less rapidly than expected.