A brief review of confirmed revenue from low-margin stock order execution was lower than expected. The company achieved revenue of 16.615 billion yuan in the first three quarters, up 4.43% year on year, and achieved net profit of 881 million yuan, up -16.58% year on year; of these, Q3 achieved revenue of 5.878 billion yuan, up 4.94% year on year, up -9.14% month on month; achieving net profit of 255 million yuan, up -33.85% year on year, lower than expected. However, according to our industry chain grassroots research, the elevator industry's shipments in Q3 were roughly flat in Q2. According to data from the National Bureau of Statistics, in January-September, the country's elevator production volume was 857,000 units, up 15.8% year on year. The company's Q3 revenue growth was negative month-on-month or mainly due to the pace of revenue confirmation. In terms of profitability, the gross profit margin for the first three quarters was 16.54%, down 0.15 pct from month to month and 3.2 pct year over year, or mainly due to confirmed revenue from low margin stock orders. It is determined that as low margin stock orders are gradually implemented, gross margin will improve in the future. The company's expense ratio for the first three quarters was 7.71%, down 0.11 pct from the interim report and 0.53 pct lower than the same period last year, and remained generally stable. In terms of cash flow, net cash flow from operating activities in the first three quarters was 175 million yuan, an improvement over the same period last year. The net cash flow/net income from operating activities was only 13.66%. The real estate industry's cash flow pressure was still high. The company's receivables turnover days rose from 41.92 days in the same period last year to 43.02 days, but since the company's customers are mainly leading real estate companies, it is less likely that large amounts of bad debts will occur. The new elevator+ “two old” elevator market is booming, and the company's share is expected to continue to rise. As of September 2019, the country's construction area grew at a cumulative rate of 8.7%, which is still very high. From January to September, the country's elevator production volume was 857,000 units, up 15.8% year on year, and the new elevator market is booming. Furthermore, supporting the installation of elevators in old buildings has been included in the government work report by the State Council for two consecutive years, highlighting the importance the government attaches to this welfare project. According to incomplete statistics, 17 provinces across the country have introduced subsidy policies for installing elevators, and the subsidy amount for each elevator is concentrated around 10-250,000. In 2018, the country completed the installation of 10,000 elevators in old buildings, and is expected to reach 18,000 in 2019, an increase of about 80% over the previous year. At the same time, demand for the renewal of old ladders has also begun to be released. As can be seen from the statistics, the number of elevators in China is close to 5.88 million. The proportion of elevators in China that are over 20 years old is 3.3%, so it is estimated that there are nearly 200,000 elevators over 20 years old. Currently, 2.77% of elevators aged 16-20 years have reached 2.77%, and it is estimated that there are 160,000 elevators in this section. As a result, there are 360,000 old ladders that are about to be updated, and the renewal demand market will soon be released. As the operating time of elevators increases year by year, the old elevator renewal market has huge potential. At present, the company has set up 86 direct branches across the country, and has set up more than 360 maintenance service networks on this basis, forming a national 24-hour service hotline consultation service, gradually extending and covering services such as product installation, maintenance, repair and transformation, and spare parts sales to all provinces and cities across the country. Judging from the strong competitiveness of the company's elevator products in terms of brand power and channel power, it is expected that the new elevator and “two old” elevator markets will continue to increase its market share. As of 2018, the company's market share will be around 10%. Summarizing the investment proposals, demand in the new elevator market is compounded by the release of “two old” elevator market demand, and we maintain our judgment that the elevator industry has ushered in an upward profit cycle. Profitability is expected to improve as the execution of the company's low-margin stock orders is completed. The company's revenue for 2019-2020 is estimated to be 222.95/25.640 billion yuan, net profit to mother is 11.60/1,538 billion yuan respectively, and the target price is 22.56 yuan/share, maintaining a “buy” rating. Risk warning: 1) The completed area of real estate falls short of expectations; 2) the decline in steel prices falls short of expectations; 3) the progress of the renovation of old buildings falls short of expectations.