Incident: The subsidiary Zhonghengyun Energy signed operating contracts with State Grid Energy Service Hangzhou Branch and North New Energy, with a total contract amount of RMB 21.98 million. The company issued an announcement: Zhonghengyun Energy, a wholly-owned subsidiary of the company, signed a “Technical Service Contract” with the Hangzhou Branch of State Grid Energy Service and the “Energy Storage Battery System and Energy Management System Contract” with North New Energy on September 25-26, 2019. The total contract amount was 21.98 million yuan; of which: 1) Signed a “technical service contract” with the Hangzhou branch of the State Grid Energy Service for an amount of 17.570 million yuan. The counterparty was a wholly-owned subsidiary of the State Grid Zhejiang Electric Power Company, and the contents of the contract were transferred to Tang Industrial Park integrated energy service platform construction project; 2) Signed the “Energy Storage Battery System and Energy Management System Contract for the Ethiopian Bartu and Bohema Solar Microgrid Project” with Northern New Energy for an amount of 4,413 million yuan. The counterparty is a subsidiary of North China International Cooperation Co., Ltd., and the contract covers the provision of energy storage battery systems and microgrid energy management systems. The smart energy management platform has been validated to help build a ubiquitous demonstration base. The company has continued to deploy the energy Internet in recent years. The self-developed smart energy management Internet platform already has stable cloud services and efficient data mining and analysis capabilities. The signing of this cooperation project has verified the company's comprehensive energy service solution capabilities. In this cooperation, the company helped build a Zhejiang ubiquitous power IoT demonstration base and a national comprehensive energy demonstration base, laying a solid foundation for continued participation in the large-scale construction of ubiquitous power IoT in the future. Deeply involved in energy storage/microgrids, and overseas market penetration is accelerating. The cooperation between the company and Northern New Energy is an African infrastructure construction assistance project. Based on its deep technology accumulation in the field of microgrids, the company provides “light-storage-fuel-off-grid” microgrid power supply systems for local non-electric villages, which helps to open up the African microgrid market, accelerate the integration of optical storage and charging and integrated energy service solutions into overseas markets, while also further supporting the country's Belt and Road strategy. The energy internet platform has shown its advantages and is expected to participate in large-scale ubiquitous construction. The company entered the field of power informatization through mergers and acquisitions of Zhongheng Borui in 2012, and raised 1 billion yuan in 2016 to build an energy Internet cloud platform, which has a first-mover advantage in the fields of smart energy and integrated energy services. Currently, the State Grid information technology service bidding volume and ubiquitous power Internet of Things construction are being accelerated. This cooperation project highlights the advantages of the company's energy Internet platform in the fields of ubiquitous power Internet of Things and energy Internet construction, and is expected to continue to support large-scale ubiquitous construction by network companies in various provinces in the future. Investment suggestions: The company has been deeply involved in power electronics and power informatization for many years, and has obvious advantages in the field of electric vehicle charging stations and HVDC. The current situation benefits from 5G construction, accelerated IDC power supply demand, “ubiquitous” comprehensive promotion, and energy Internet construction. This cooperation highlights the company's dominant position in the field of integrated energy services and lays a solid foundation for ubiquitous subsequent construction. We expect the company's net profit in 2019-2021 to reach 1.51/2.23/276 million yuan, EPS of 0.27/0.40/0.49 yuan, respectively, and PE corresponding to the closing price of September 26, 2019, 44.6/30.2/24.4 times, respectively, maintaining an increase in holdings rating. Risk warning: NEV production and sales fall short of expectations, 5G investment falls short of expectations, macroeconomic growth rate falls short of expectations