Guide to this report: Hitachi Elevator's profit has increased dramatically, and investment income has led to a significant recovery in the company's performance. The company's market share has increased, benefiting from the recovery of the elevator industry and the catalysis of policies to upgrade and install old elevators. Key investment points: Conclusion: Hitachi Elevator's profit has increased dramatically, and investment income has led to a significant recovery in the company's performance. The company's EPS for 2019-2021 is expected to be 0.63, 0.70, and 0.73 yuan. Considering the company's future performance growth rate, the target price is 11.4 yuan, corresponding to 18 times PE in 2019, increasing holdings. Hitachi Elevator's profit increased dramatically, and the growth rate of company-related transactions increased from 3.5% to 20%. ① The company holds 30% of Hitachi Elevator's shares. The investment income contributed by 2019H1 Hitachi Elevator was 238 million yuan, accounting for up to 93% of the company's non-net profit; the company's main business deducted non-net interest rate was less than 1%. ② Benefiting from the recovery in industry demand and the company's cost control, Hitachi Elevator's net interest rate rebounded significantly to 2015 levels. 2019H1 Hitachi Elevator revenue increased 28% year over year, net profit increased 151% year over year; net profit rebounded from 6.7% in 2018 to 9.3% in 2019 H1. ③ The company provides spare parts for Hitachi Elevators, and the growth rate of the company's related transactions with Hitachi Elevators in 2019 increased from 3.5% to 20%. This confirms Hitachi Elevator's high revenue growth, and investment income has greatly boosted the company's performance. The company's market share has increased, benefiting from the recovery of the elevator industry and the catalysis of policies to upgrade and install old elevators. ① Looking at China from Hitachi's point of view, demand for maintenance, renewal, and transformation is gradually being released. Hitachi's global elevator business accounts for 53% of revenue in China. In 2018, Hitachi ranked first in the market for new elevator installation orders in China. ② The company's elevator market share has increased, and prices are expected to stabilize. Increasing market share is the company's business goal. The company's elevator sales grew by 30% in 2018. Prices are expected to stabilize as industry demand stabilizes. ③ The elevator industry has bottomed out and picked up. Renewal demand is expected to relay real estate, and the installation of elevators welcomes policy catalysts. There is a potential demand for the installation of 2 million elevators in old neighborhoods, and policy subsidies for the renovation of old cities have been increased, and it is expected that the amount will be increased rapidly. Catalyst: The policy of replacing old elevators. Increased risk: There is a risk of a sharp decline in new real estate starts, increased competition in the industry, and a decline in investment returns.