The company predicts a 30% to 59% year-on-year increase in profit for the first three quarters of 2019, and CITIC Haizhi released a performance forecast for the first three quarters of 2019: net profit for the first three quarters is expected to be 149.62 million yuan to 162.82 million yuan, an increase of 70% to 85% year-on-year, corresponding to a profit of 0.25 to 0.27 yuan/share per share. Net profit for the third quarter was 58.81 million yuan to 72.1 million yuan, an increase of 30% to 59% over the previous year, corresponding to earnings of 0.10-0.12 yuan/share per share, which is in line with our expectations. Key points of interest According to our estimates, after deducting the impact of the wrong subsidy period, the year-on-year profit growth rate for the third quarter was -16% to 13%. According to the company announcement, the subsidiary Haizhi General Aviation's 2019 special funding subsidy for general aviation development (RMB 27.698 million) was confirmed in the third quarter, while 2018 was confirmed in the fourth quarter (RMB 23.7096 million). After deducting the impact of the subsidy, profit for the third quarter increased by -16% to 13% year-on-year. We estimate that the year-on-year profit growth slowdown in the third quarter was mainly due to the year-on-year decline in oil prices. The offshore oil business is the company's main source of revenue and profit, and we estimate that the performance of this business lags behind international oil prices for about half a year. The average oil price in the first half of this year was about 66 US dollars/barrel, down about 7% from the same period last year, causing the company's profit growth rate to slow in the third quarter compared to the same period last year. We expect profit growth to slow further year-on-year in the fourth quarter. 1) According to the judgment of the CICC Group, global crude oil demand weakened this year, and short-term geopolitical factors had limited impact on oil prices. The average price of oil is expected to be 60 US dollars/barrel in the second half of the year (down 17% year on year, the average price rose 26% year on year in 2018), and the average price for the whole year of 2018 was 62 US dollars/barrel (down 13% year on year, up 30% year on year). We estimate that the company's offshore oil business performance may be lower than the same period last year; 2) In the fourth quarter of last year, due to the large amount of subsidies, it was confirmed that the company's offshore oil business performance was lower than the same period last year; 2) In the third quarter of last year, due to the large amount of subsidies, it was confirmed that the company's offshore oil business performance was lower than the same period last year; 2) In the third quarter of last year, due to the large amount of subsidies, it was confirmed for the company's single quarter. The profit impact is quite obvious; 3) Airdirect H225 flight grounding compensation revenue was confirmed to be about 58 million yuan in the fourth quarter of last year. In summary, we expect the year-on-year growth rate of the company's profit to slow further in the fourth quarter. Valuation and recommendations The company's current stock price corresponds to 32.3/29.6 times P/E in 2019/2020. As the performance was in line with expectations, the 2019/2020 profit forecast of $144/157 million remained unchanged, and the target price of RMB 7.7 million and the neutral rating were maintained. The target price corresponds to 32/30 times P/E in 2019/2020, with 0.3% upside compared to the current stock price. Demand in the risky offshore oil market fell short of expectations; RMB depreciated sharply against the US dollar; subsidies declined.