Incident: The company announced the 19th interim report. Revenue for the first half of the year was 1,819 million yuan, up 0.62% year on year; net profit to mother was 135 million yuan, a loss of 607 million yuan for the same period last year. Comment: 1. Long Xin has entered the divestment process of more than 50%. Long Xin has entered the divestment process, 19H1's revenue of 1,819 billion yuan, up 0.62% year on year. Excluding Longxin's other main business revenue of 1,777 billion yuan, a total net profit of about 225 million yuan increased 78% year over year. In the first half of the year, due to factors such as confirmed centralized delivery and a low base of the previous year, the growth rate will slow down in the second half of the year, but the current order situation is good: 1) The revenue of the main rail business increased by 51.63% year on year, compared to the previous year. The increase was 36.02%, and the absolute amount was 2.86 times the rail transit revenue in the first half of the year. Coney's market share of door systems continued to rise in the first half of the year, with both urban rail and train vehicles exceeding 50%; 2) NEV parts revenue of 194 million yuan increased 17.28% year over year; 3) Longxin Technology's revenue of 42.65 million yuan in the first half of the year had a net profit loss of 89.74 million yuan. The chairman of Longxin Technology, which was previously acquired by the company, personally experienced major problems. In the first half of '18, Coney estimates a total impairment loss of 860 million yuan in liabilities and assets, leading to a consolidated financial loss of 610 million yuan in the first half of the year and a loss of 3.15 billion yuan for the whole year. Since the company discovered Chairman Long Xin's problem, it has actively taken countermeasures, and made comprehensive calculations on estimated liabilities, accounts receivable, and goodwill in 2018. On June 26, 2019, Coney announced that it plans to sell Long Xin to the Nanjing Zijin Guancui Private Enterprise Relief and Development Fund for 400 million yuan. It passed the shareholders' meeting on the number 8.5, and the divestment is expected to be completed before the end of the year. 2. In the first half of the year, Long Xin still had losses, which dragged down the net profit ratio during the period of 19H1. Net profit of 19H1 decreased significantly by 135 million yuan. The same period last year was a loss of 607 million yuan, after deducting a net loss of 137 million yuan without a net loss of 50.87 million yuan last year. The overall gross profit margin was 30.6%, a year-on-year decline of nearly 2 percentage points. Looking at Long Xin, the gross margin was 32%, and there was also a slight year-on-year decline. Excluding Long Xin, net profit from other main businesses of 225 million yuan surged 78% year-on-year. The increase of more than 40% of revenue was mainly due to good control of expenses during the period. The company's expenses of 350 million during the first half of the year accounted for 19.16% of operating income. Specifically: 1) Sales expenses of 85.76 million yuan remained the same; 2) the year-on-year increase of 24.5% in management expenses was mainly a salary increase; 3) Revenue from financial expenses of 11.8 million yuan increased 37% year over year; 4) R&D expenses of 106 million yuan, down 8.8% year on year, mainly due to a marked decrease in material costs and labor costs used for R&D. 3. After entering the divestment, the cohesion of Long Xin's main business increased. Currently, it is in a low valuation. In the past two years, due to the acquisition of Longxin Technology, Long Xin has had a huge fluctuating impact on the consolidated statements of listed companies. However, the company has continued to cultivate its main rail transit products, channels, and market share in the past few years, and has gradually entered the harvest season. As subway construction has accelerated in recent years, the company's benefits are still quite obvious. The failed acquisition market has fully responded. Returning to the original main business, we expect net profit of 350 million yuan. Currently, the corresponding valuation is 14 times. If we consider Long Xin, the estimated loss of 100 million yuan and the return on disposal of assets of about 200 million yuan (estimated value), the total net profit of the listed company to the mother is 11.6 times that of about 450 million, which is at a low valuation. 4. Risk warning: The divestment of Longxin did not meet expectations; the price of raw materials rose sharply.