Investment points: In the first three quarters of 2019, the company achieved total operating income of 94.293 billion yuan, an increase of 4.07% over the previous year; realized net profit of 1,783 billion yuan, a year-on-year decrease of 47.10%, a year-on-year decrease of 47.10%, which is about 0.17 yuan in diluted EPS. The performance is in line with our expectations. Among them, the third quarter achieved total operating income of 31,899 billion yuan in a single quarter, a year-on-year decrease of 7.35%, and net profit of 615 million yuan, a decrease of 60.30% over the previous year and a decrease of 23.02% over the previous year. Production was limited until production declined in the third quarter. Due to strict environmental production restrictions in the Beijing-Tianjin-Hebei region in the third quarter, the company's production was affected to a certain extent. According to data judgments and estimates from the China Steel Association, the company achieved steel production of 20.59 million tons in the first three quarters, an increase of 10.69% over the previous year, of which 6.49 million tons of steel were achieved in the third quarter, a decrease of 6.08% over the previous year and a decrease of 6.82% over the previous year. The overall profitability of the industry continued to decline in the third quarter. Profitability is under pressure. The company achieved gross profit and net profit per ton of steel in the first three quarters of 489 and 87 yuan, respectively, down 187 and 108 yuan from the previous year. Among them, the gross profit and net profit achieved by tons of steel in the third quarter were 477 and 95 yuan, respectively, down 174 and 129 yuan from the previous year, down 23 and 20 yuan from the previous year. In the third quarter, the company's expenses rate for the period was 6.85%, a slight increase over the same period last month, mainly due to an increase in the management expense ratio and sales expense ratio, while the R&D expense ratio declined. Production restrictions during the heating season may be relaxed somewhat. Of the “26+2" cities in Beijing-Tianjin-Hebei since October this year, the PM2.5 concentration in 21 cities is lower than the same period last year and has improved significantly. Considering the high air pollution base since November last year, the pressure on all regions to complete pollutant control targets may be drastically reduced this year. This may also cause the implementation of production restrictions during the heating season to relax. With the company's continuous ultra-low emission transformation, the emissions of sulfur dioxide, nitrogen oxides, smoke and dust from tons of steel all declined compared to the previous year, and the main energy and environmental protection indicators remained industry-leading. The company's core production plants, Tangshan Branch and Handan Branch, were all selected into the “green manufacturing enterprises” list published by the Ministry of Industry and Information Technology. If production limits fall during the 2019-2020 heating season, the impact of production restrictions on the company's production will continue to decrease, which is beneficial to the company's capacity utilization rate. Maintain profit forecasts and maintain an “increase in holdings” rating. Considering the current decline in industry profits as a whole, we maintain our net profit forecast for 2019-2020 at 20.42/17.57/1,566 billion yuan, corresponding to EPS of 0.19/0.17/0.15 yuan, and the current stock price corresponding to PE13/15/17 times, maintaining the “increase in holdings” rating.