The incident company released its 2019 three-quarter report. In the first three quarters, it achieved operating income of 819 million yuan, an increase of 63.35% over the previous year; realized net profit of 1994 million yuan, a year-on-year decrease of 75.36%; and realized net profit of 12.14 million yuan, a year-on-year decrease of 83.23%. 2019Q3 achieved revenue of 509 million yuan in a single quarter, an increase of 145.52% over the previous year, and realized net profit of 9.076 million yuan, an increase of 244.27% over the previous year. Briefly, the company's performance in the third quarter improved dramatically, and investment in R&D continued to increase. 2019Q3 achieved revenue of 509 million yuan in a single quarter, an increase of 145.52% over the previous year, and realized net profit of 90.76 million yuan, an increase of 244.27% over the previous year. The sharp increase in the company's Q3 revenue in the single quarter was mainly due to the increase in acceptance projects due to improved project implementation efficiency. The company's net profit for the first three quarters fell 75.36% year-on-year, mainly due to the seasonal characteristics of the company's business, and the concentration of orders at year-end acceptance and confirmation. At the same time, the company has increased investment in R&D, and the number of R&D personnel has also increased, increasing the R&D cost rate by 2.02pct, which has a certain impact on the company's performance. Ongoing orders are plentiful, and high performance growth can be expected. The 2018 annual report shows that the total amount of the top ten unaccepted contracts disclosed by the company was 1,823 million. As of September 30, 2019, data from the China Recruiting Network showed that the company won a total of 340 million yuan in bid orders in the first three quarters of this year (the statistics are for high-value orders), an increase of 86% over the previous year (excluding orders from HKUST Li'an). The company has plenty of orders in hand, which guarantees the company's continued high growth. It won the bid for the first phase of the smart security project in Foshan, and is optimistic about the company's prospects for replicating the city's lifeline. After the completion of the first phase of the construction of the Hefei City Lifeline, the company achieved good results. It is currently actively expanding the second phase of the project, which has also increased from 76 million yuan to 920 million yuan. According to the Emergency Management Report, the Hefei Municipal Committee and Municipal Government plan to invest a total of 3 billion yuan in the city's lifeline. At present, a total of about 1 billion yuan has been invested in the first and second phases of the project. It is estimated that the Hefei project will still have a market space of 2 billion yuan in the future, indicating that the safety market in a single city will be quite large. At the same time, in addition to Hefei, the company's smart and safe city projects have been replicated offsite in Xuzhou, Wuhan, Huaibei and other places. The company won a bid of 220 million dollars for the first phase of the smart security Foshan project, which is expected to accelerate the company's development in the Pearl River Delta market. It is optimistic that the company's urban lifeline replication prospects, environmental safety has already been implemented in many places, and the company's environmental safety and other new business development prospects. At the end of 2017, a total of 2,100 black and smelly water bodies were identified in China. By the end of 2018, 1,745 black and smelly water bodies had been treated. As water pollution control gradually progresses, how to maintain and treat water bodies is critical. The company's refined water environment warning and traceability system can determine what kind of sewage pollution the water body is by comparing the water quality fingerprints of water bodies. It can quickly and accurately trace pollutants and achieve the goal of comprehensive water pollution control. According to data from China Procurement Network, in October alone, the company has won the bid for three environmental safety projects: the 3.01 million yuan Panzhihua Vanadium and Titanium High-tech Industrial Park water pollution traceability monitoring system; the 14.38 million yuan Gansu drinking water source radiation environment online automatic monitoring station project; and the 2.06 million yuan Ruicheng County Industrial Cluster Sewage Warning and Traceability Supervision System Phase II project. The total amount is close to 20 million yuan. The company's environmental safety progress is obvious. Profit forecasting and investment ratings: As the company's urban lifeline business continues to grow in scale in individual cities and continues to be replicated in other cities, while new businesses such as environmental safety progress smoothly, the company's revenue is expected to maintain rapid growth. The company's net profit from 2019 to 2021 is estimated to be 205, 2.90, and 397 million yuan respectively, and the corresponding EPS for the years 19 to 20 is 0.88, 1.25, and 1.71 yuan, respectively, and 31, 22, and 16 times the PE corresponding to the current stock price. The initial rating is given a buying rating. Risk warning: Overseas order confirmation revenue falls short of expectations; Hefei's urban lifeline project falls short of expectations; implementation in other cities is slow.