Event: The company announced on August 27 that 2019H1 had revenue of 753 million yuan (+19.41%), net profit of 91 million yuan (+112.29%), gross profit margin of 25.64% (+3.28pcts), and net profit margin of 12.16% (+4.32pcts). Key investment points: The optimization of offshore petroleum business drives performance growth: the company's revenue and net profit for the first half of the year reached 753 million yuan and 91 million yuan respectively, achieving the best performance in the same period in history; revenue and net profit increased 19.41% and 112.29% year-on-year respectively, the fastest growth rate since 2009 and 2010, respectively. The air transport business, as the company's core business, mainly includes offshore oil services and port pilotage services. The air transport business achieved revenue of 704 million yuan (+18.52%) during the reporting period, accounting for 93.5% of the company's overall revenue. Among them, the number of contract aircraft, contract prices, and flight operations in the offshore oil business all increased compared to the same period last year, maintaining an absolute advantage in domestic market share. The market share of the offshore oil business reached 69.02% at the end of the reporting period. During the reporting period, the company's flight volume achieved 18,862 combined flights (+9.35%) and 16,858 hours and 16 minutes (+9.00%), driving a significant improvement in the company's revenue. Net profit increased significantly over the same period last year, mainly due to the fact that the company received a special funding subsidy of RMB 21.463 million for general aviation development on May 31, 2019, combined with the optimization of air transport business. Prices in the international crude oil market are picking up, and the comprehensive gross margin has further increased: the company's consolidated gross margin for the first half of the year was 25.64% (+3.28pcts), an increase in gross margin compared to the same period last year. Looking at the business sector, the gross margins of the air transport business, aviation maintenance business, and financial leasing business were 26.53%, -11.23%, and 40.83% respectively. In addition to the air transport business, the gross margin level of other sectors declined. Among them, the gross margin of the aviation maintenance business declined sharply, mainly due to the company's delivery of 5 helicopters during the reporting period and only 1 helicopter in the same period last year, leading to an increase in aviation material consumption. After the company's gross margin was at a historic low in 2017, it has gradually rebounded until now. Along with the steady recovery in oil prices and the formal promulgation of the “seven-year action plan” for three barrels of oil, it will start a sharp increase in the workload and equipment demand of China's oil service industry, driving the capital expenditure budget of China's petroleum enterprises to continue to rise. Among them, the capital expenditure of CNOOC, the company's largest customer, in 2019 was 70-80 billion yuan, an increase of 11%-27% over the previous year. The company will also fully benefit, driving the company's gross margin to further increase. Internationalization of CNOOC's business to enhance the company's international competitiveness: According to the company's public information, CNOOC, as the company's main customer, contributes about 70% of revenue. Although the company currently maintains a close and stable cooperative relationship with CNOOC, if demand in the offshore oil market is weak, it may drag down the company's overall performance. In July 2018, the company plans to invest approximately RMB 3.37 million to establish a wholly-owned subsidiary, CITIC Haizhi (Saudi Arabia) Co., Ltd., in Saudi Arabia. Saudi Arabia is China's main supplier of crude oil, and China's large state-owned oil companies have been speeding up the construction of overseas oil field projects in Saudi Arabia and other countries. The company has set up a Saudi company to speed up the layout of the local offshore oil service market, further enhance the company's international competitiveness, and enhance the company's influence on overseas brands. The Guangdong-Hong Kong-Macao air ferry project was approved, opening up a new growth point for the company's performance: the company completed the first test flight of the B-7189 helicopter on the Shenzhen-Hong Kong route on January 29, 2019, and recently stated on the interactive platform that it has completed the test flight of the Guangdong-Hong Kong-Macao air ferry project, and that official passenger flights will be carried out in the future according to market conditions. Since the official announcement of the “Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area” in February 2019, the company has actively integrated into the construction of the Guangdong-Hong Kong-Macao Greater Bay Area by promoting air ferry projects, and has further explored opportunities for the development of the company's general aviation business in the process to accelerate the continuous and steady growth of the company's performance. Investment and construction: As one of the largest general aviation companies in China, the company has promoted further growth in the market share of the air transport service business by continuously improving and optimizing the operating qualifications and capabilities of all of its general aviation businesses and continuing to expand its business landscape. With the acceleration of the internationalization process of the company's offshore oil business and the smooth implementation of projects in Guangdong, Hong Kong and Macao, it is expected to open up new growth points in the company's performance and drive rapid growth in the company's performance. We forecast that the company's net profit for 2019, 2020, and 2021 will be 188 million yuan, 190 million yuan, and 210 million yuan respectively; EPS will be 0.30 yuan, 0.31 yuan, and 0.35 yuan respectively. The current stock price corresponding to PE is 29.5 times, 28.45 times, and 25.03 times, respectively. Risk warning: Demand in the international crude oil market is lower than expected, new production capacity is not well put into operation, and raw material prices are rising.