Event: The company released its 2019 semi-annual report. The company achieved revenue of 933 million yuan in 2019H1, an increase of 27.75% over the previous year; net profit of 66 million yuan, an increase of 7.87% over the previous year; net profit after deduction of 56 million yuan, an increase of 10.80% over the previous year. Investment in railway construction is strong, and performance growth is in line with expectations. The development trend of the domestic rail transit industry has been good since this year. According to data released by the National Railway Group, the country's total railway fixed asset investment reached 322,010 billion yuan in the first half of 2019, an increase of 2.97% over the previous year, exceeding 40% of the annual plan. In this context, demand for rail transit operation and maintenance equipment is strong, driving the company's performance to grow steadily. By product, the company's 2019 H1 construction maintenance series achieved revenue of 144 million yuan, an increase of 102.86%; the power supply system operation and maintenance series achieved revenue of 11 million yuan, a year-on-year decrease of 40.02%; the rail traffic signal system achieved revenue of 191 million yuan, an increase of 40.78%; the locomotive and vehicle operation and maintenance series achieved revenue of 559 million yuan, an increase of 21.38% over the previous year; and financial leasing revenue of 210 million yuan, an increase of 100% over the previous year. Operation and management are continuously optimized, and profitability is in line with expectations. The company's H1 gross profit margin and net profit margin in 2019 were 54.40% and 7.53%, with year-on-year changes of 3.38 and -1.31 pct. The company's expense ratio for the H1 period in 2019 was 46.58%, down 1.13 pct year on year; of these, sales expense ratio, R&D expense ratio, and financial expense ratio were 12.28%, 19.87%, 10.65%, and 3.78%, with year-on-year changes of -0.76, -1.03, 0.15, and 0.52 pct. The company's H1 operating cash flow in 2019 was -230 million yuan, which was affected to some extent by the increase in R&D investment, but there was a significant improvement over last year, mainly due to the company's strengthened repayment management, reduced costs, and improved efficiency. By strategically investing in PPP projects, the company promotes the development of the entire line of operations. In May of this year, the company and its wholly-owned subsidiary Shintetsu Operation formed a consortium with China Construction Company and its related parties to win the bid for the first phase of the Tianjin Metro Line 7 project PPP project. The company and Kobe Railway Operation invested a total of 157 million yuan. This is the company's first full-line PPP project with full participation. Construction began on July 12, and the construction period of the project is 4.5 years. During the construction and operation period of Line 7, the company was responsible for equipment supply and post-operation business. This project verifies that the implementation of the entire line operation business strategy of the company, with the support of China Investment Group, will effectively promote the company's progress in the field of subway line operation and maintenance, and further support the company's future rail transit operation and maintenance business needs. Furthermore, on July 19 this year, the company actually invested 39.3569 million yuan in the Hangzhou-Shaotai High Speed Rail PPP project, and officially became a consortium member of the Hangzhou-Shaotai High Speed Rail PPP Project. This investment will help the company accumulate rail transit resources and experience, and help the company continue to grow orders in the future. Investment suggestions: We expect the company's revenue growth rates from 2019 to 2021 to be 32.2%, 31.6%, and 24.8%, respectively, and net profit growth rates of 36.5%, 33.6%, and 28.5% respectively, with outstanding growth. For the first time, we gave a buy-A investment rating, with a target price of 4.20 yuan for 6 months, equivalent to a dynamic price-earnings ratio of 20 times in 2020. Risk warning: The prosperity of the industry falls short of expectations, and the progress of rail transit construction falls short of expectations. Reminder: The largest shareholder of the Shenzhou High Speed Rail is SDIC Hi-Tech, and the actual controllers of SDIC Hi-Tech and Anxin Securities are all China Investment Group.