The 1H19 performance was in line with expectations. Yinfei Storage announced 1H19 results: operating income of 395 million yuan (+12%), net profit of 58 million yuan (+3%), corresponding profit per share of 0.19 yuan, net profit of 51 million yuan (+6%) after deducting non-return net profit of 51 million yuan (+6%), which is basically in line with expectations. In terms of ratio, gross profit margin decreased by 0.4ppt to 32.7%, and net profit margin decreased by 1.5ppt to 14.7%. At the same time, the net operating cash flow of 1H19 was 0.3 billion yuan, which is significantly narrower than the net outflow of 1H19 of 600 million yuan, and the company's business repayment capacity has increased. In terms of a single quarter, 2Q19 had revenue of 257 million yuan (+3%), gross profit margin decreased by 0.3ppt to 33.5% year on year, net profit margin decreased by 0.9ppt to 17.0%, net profit margin decreased by 0.9ppt to 17.0%, net operating cash flow inflow of $17 million, and net inflow of $08 billion for the same period last year. Affected by the macroeconomic situation, the company's sales side is under pressure. While the release of production capacity has slowed, profit margins have declined. The company's warehousing robot system integration business continued to maintain a high growth rate: by business, the automated system integration business (warehousing robot) revenue increased 37% year on year, contributing 52% of revenue. The revenue growth rate of the traditional shelf business was lower than -7%, accounting for 46% of revenue, while the remaining service revenue, such as warehousing, contributed less than 1% of revenue. Development trends New construction projects will enhance the company's large-scale production advantages: in July 2019, the company purchased about 50 acres of land in the Nanjing Jiangning Binjiang Development Zone to build a manufacturing center for intelligent logistics robots and automated warehousing systems. The total investment of the project is 300 million yuan, and we expect it to be completed in the second half of 2021. At the same time, the company's Ma'anshan production line project is expected to be partially put into operation as early as the second half of 2020, with additional production capacity reaching 150,000 tons. We expect to contribute 1-2 billion yuan in revenue and 13—260 million yuan in net profit. I think the new production base will further strengthen the company's product advantages and increase its market share. Profit forecasting and valuation. Considering the high macroeconomic pressure and the slowdown in the growth rate of the company's automated integrated systems business, we lowered the 2019/20e profit by 13%/7% to 109/143 million yuan. The neutral rating was maintained, but due to the decline in profit and the downward shift in the valuation center, we lowered our target price of 6.3% to 7.50 yuan, corresponding to 20.8 times the 2019 price-earnings ratio and 15.8 times the 2020 price-earnings ratio, which is 3.9% higher than the current stock price. Risk macroeconomic stagnation, inventory backlog, and large fluctuations in steel prices.