1. Event: The company released the three-quarter report, net profit increased 32.22% over the same period of the previous year. On October 21, 2019, the company released the 2019 three-quarter report. The first three quarters achieved operating income of 1.56 billion yuan: a year-on-year increase of 20.98%; realized net profit attributable to shareholders of listed companies of 148 million yuan, an increase of 20.13% over the previous year, achieved operating income of 627 million yuan in the third quarter, an increase of 12.13%; and net profit attributable to shareholders of listed companies was 82.22 million yuan, up 32.22% year on year. 2. Comment: Revenue continues to grow rapidly. During the reporting period, the company achieved revenue of 627 million yuan, an increase of 12.13% over the previous year, and achieved revenue of 1.56 billion yuan in the first three quarters of 2019, an increase of 20.98% over the previous year. Overall gross margin was 53.3%, up 4.73 percentage points from the same period last year. It can be seen that the company's full-line operation and maintenance service provider strategy is beginning to bear fruit. At the same time, the company's continued growth in orders lays the foundation for continued growth in future revenue. The number of new orders has continued to grow, and future performance can be expected. In the first three quarters of 2019, the company continued to strengthen its market development efforts, and orders in the railway market and urban rail market all increased. In January-September, the company signed a new contract of 2,404.8 billion yuan, an increase of 31% over the previous year. The company's new orders continue to rise, and subsequent performance is worth looking forward to. The cash flow situation has further improved. In the first three quarters, the net cash flow from the company's operating activities was about -191 million yuan, compared to -893 million in the same period last year. Cash flow improved significantly. Compared with the same period last year, cash inflow from operating activities increased by 28%, cash outflow from operating activities decreased by 10%, and cash received from the sale of goods and the provision of labor services increased by 447 million yuan, an increase of 36.11% over the same period last year, which is the main reason driving the improvement in cash flow. The period costs are still high. In the first three quarters, the company's period expense ratio was 43.53%, up 2.46% from the same period last year. Among them, sales, management, R&D, and financial expenses were 11.55%, 17.93%, 9.70%, and 4.35%, respectively, with changes of 0.20%, 1.49%, -0.47%, and 1.24%, respectively. Short-term loans increased significantly during the reporting period, with an increase of 33.04%, which is the main reason for the increase in financial expenses. 3. Investment recommendations We estimate that from 2019 to 2021, the company's net profit attributable to shareholders of the parent company will be 485, 5.99, and 754 million yuan respectively, corresponding to PE of 20, 17, and 13 times. Considering policy support underpinned by macro-level infrastructure, huge market space in the post-railway market at the industry level, leading edge within the industry at the company level, and current marginal improvements in equity, cash flow, and business innovation, we maintain our “recommended” rating. 4. Risk warning: New orders fall short of expectations, repayment cycles are too long, and goodwill impairment risk.