After the company eliminated Longxin Technology, its core business grew beautifully. With the introduction of bailout funds and the divestment of Longxin Technology came to an end, the company's operations got back on track. The company's main rail transit business orders grew at a year-on-year rate of 36.02%, and the NEV layout progressed steadily, maintaining a “buy” rating. After excluding Longxin Technology, the performance growth was ideal, and the competitiveness of the core business remained the same. In the first half of 2019, the company achieved operating income of 1,819 million yuan, a year-on-year increase of 0.62%, achieved net profit of 135 million yuan to mother, and a loss of 608 million yuan in the same period last year. Excluding Longxin Technology, the company achieved revenue of 1,777 billion yuan in the first half of the year, an increase of 39.86% over the previous year. The overall gross profit margin for businesses other than Longxin Technology is 31.96%. We estimate that the actual profit growth rate of the company's core business in the first half of the year may exceed 50%. The plan shows sincerity, and the business is expected to get back on track after divesting Long Xin. The company previously announced that it plans to sell 100% of Longxin Technology's shares to the bailout fund. The company's 12 management pledged 25% of the shares, with a transaction consideration of 400 million yuan. Currently, the plan has been approved by the shareholders' meeting. It is expected that the company will overcome the crisis caused by this acquisition. The main rail transit business is full of orders, and the growth rate is highly guaranteed. By the end of this reporting period, orders in the company's rail transit sector had also increased by 36.02% to 3,988 billion yuan, which is higher than the 28.6% growth rate of orders at the end of 2018. In the first half of the year, the company's rail transit business revenue also increased by 51.63% to 1,499 billion yuan. The impressive growth rate may have been helped by mobilized early delivery during the reporting period. The company still continues to have more than 50% of the market share of the city rail gate system for more than ten years, and the share of EMU external stores is higher than 50%, and its share in the standard and dynamic market share is higher. The company's self-made core components have outstanding advantages, which can ensure overall control of market share and gross margin, and maintain the strong competitiveness of the door system. Urban rail accounts for a high proportion of rail transit revenue, fully benefiting from the peak opening of domestic railways and subways in 2019-2020. In addition, the company set up a new subsidiary in Guangzhou to speed up the layout of key regions and continue to promote new products such as gate doors, etc., and rail transit growth is highly certain. The NEV business is progressing steadily. The company's main high-voltage, charging wiring harness assemblies and bus gate systems maintained market share among own-brand OEMs and increased joint venture brand customer expansion efforts. During the reporting period, the NEV parts segment's revenue also increased 17.28% to 194 million yuan, and the subsidiary Coney New Energy achieved net profit of 2.64 million yuan, an increase of 25.60% over the previous year. At the same time, the company's traditional automobile precision forged parts have received orders from BMW, Yifa, Musashi, etc., and it is expected to open up market space in collaboration with new energy products. Risk factors: Longxin's divestment progress fell short of expectations; domestic railway or subway construction progress fell short of expectations; gross margin of the company's products declined; new energy vehicle parts or traditional automobile castings and forgings fell short of expectations, etc. Investment advice: Considering the company's good delivery pace in the rail sector in the first half of the year, we slightly raised the company's net profit forecast for 2019-21 to 3.4/40/450 million yuan (the original forecast was 3.3/38/430 million yuan). The net profit forecast for 2019 increased by 20.50% compared to 2018 (excluding Longxin Technology). Currently, the company's market value corresponds to 15 times PE in 2019, maintaining the company's “buy” rating.