Event: The company achieved revenue of 7.2 billion yuan in Q3, a year-on-year decrease of 17%, net profit of 0.6 billion yuan, a year-on-year increase of 1124%; cumulative revenue for the first three quarters was 2.5 billion yuan, a year-on-year decrease of 8%, net profit of 180 million yuan, a year-on-year increase of 167%, gross profit margin of 27%, and net profit margin of 7%, up 3 and 4 percentage points, respectively. The restructuring of air conditioning for buses has led to a continuous increase in profits. The company is the leading air conditioner for large and medium-sized passengers in China. The product structure is continuously being optimized. In particular, there are more supporting products for new energy buses, driving up the value of bicycles. Subsidies for new energy buses declined in August. Before the subsidy was switched, air conditioner shipments increased simultaneously, guaranteeing the company's high profitability for large and medium-sized air conditioners in the first three quarters. The expansion of overseas markets is worth looking forward to. The growth in overseas markets mainly comes from two points: (1) active deployment of refrigerated vehicle air conditioning, which has strong profitability; (2) overseas buses are expected to become potential blue ocean markets, including Russia, India, China, and Southeast Asia. Passenger car air conditioning is progressing steadily, seeking a breakthrough in the joint venture system. The company currently supports passenger car customers such as Changan Autonomous, Jianghuai, and SAIC-GM-Wuling. The supply system is gradually advancing to high-end brands, and condensers and pipelines have been recognized by customers. Investment suggestions: We estimate that the company's net profit for 2019 and 2020 will be 240 million and 270 million, respectively, and the corresponding valuations will be 13 and 11 times, respectively. We recommend that you pay active attention. Risk warning: Subsidies for new energy buses affect profit levels; the progress of air conditioning support for passenger cars falls short of expectations.