The incident company disclosed its three-quarter report. The first three quarters achieved revenue of 4.526 billion yuan, an increase of 11.92% over the previous year, and net profit of 361 million yuan, an increase of 38.85% over the previous year. The short review benefited from the high boom in the elevator industry and rapid growth in performance. In line with expectations, the company achieved revenue of 4,526 billion yuan in the first three quarters, an increase of 11.92% over the previous year, and net profit of 361 million yuan, an increase of 38.85% over the previous year. Looking at the quarter, quarterly revenue for the first three quarters increased quarter by quarter, of which Q3 revenue was 1,734 billion yuan, up 10.84% year on year, up 5.15% month on month, in line with the changing trend in elevator industry shipment volume from year to date. In terms of profitability, the gross profit margin for the first three quarters was 13.82%, which is roughly the same as the first half of this year or the same period last year. In line with the results of grassroots research on the industry chain, elevator prices have remained generally stable from year to date. In addition, the company's Q3 investment income in joint ventures and joint ventures was 61 million yuan. The month-on-month decline was mainly due to the pace of revenue confirmation by the joint venture Hitachi Elevator in the third quarter. However, according to grassroots research on our industry chain, shipments in the elevator industry have maintained relatively rapid year-on-year growth since the beginning of the year. Data from the National Bureau of Statistics also showed that in January-September, the national elevator production was 857,000 units, an increase of 15.8% over the previous year. Net cash flow/net profit from operating activities in the first three quarters improved significantly compared to the same period last year, and the cash flow of the elevator industry improved dramatically. Furthermore, by the end of the third quarter, the company had received 703 million yuan in advance payments, an increase of 17.06% over the previous year and an increase of 4.7% over the previous year, mainly due to an increase in new orders received, which guarantees future performance growth. The number of elevators per capita is lower than that of developed countries. The company will benefit from industry growth. The number of elevators per capita in Korea is 140 units/10,000, and the European average is 105 units/10,000. In 2018, the number of elevators per capita in China was only 48/10,000, and the number of elevators per capita in China's urban population was only 84/10,000. Judging that with the increase in the urbanization rate and the increase in the number of elevators per capita, China's elevator market demand is far from peaking. Our judgment is that in the future, in addition to newly built commercial housing, the installation of elevators in old neighborhoods will also contribute more and more to the demand for new elevators, which can to some extent mitigate fluctuations in elevator market demand caused by fluctuations in the real estate cycle. According to statistics, there are 3.5 million old buildings in the country, of which 2.5 million old buildings meet the requirements for installing elevators. If 50% of the old buildings are equipped with elevators, the potential market space is 1.25 million elevators. Even if only 30% of the old buildings are equipped with elevators in the end, the potential demand is 750,000 elevators. According to data from the Ministry of Housing and Construction, in 2018, more than 10,000 elevators have been installed in old neighborhoods across the country, more than 4,000 are under construction, and more than 7,000 are undergoing preliminary formalities; it is estimated that 18,000 elevators will begin nationwide by the end of 2019. Furthermore, the number of elevators owned in China is close to 5.88 million, and the proportion of elevators used in China that are over 20 years old is 3.3%, so it is estimated that the number of elevators older than 20 years is close to 200,000. Currently, the proportion of elevators used by elevators aged 16-20 has reached 2.77%, and it is estimated that there are 160,000 elevators in this section. As a result, there are 360,000 old elevators that are about to be upgraded, and the demand for renewal is about to be released. Demand for new elevators has been superimposed and updated, and demand in the elevator market has not yet peaked. In 2018, Guangri Co., Ltd. achieved sales of 15,400 elevators. It has a strong competitive advantage and will fully benefit from the growth of the elevator industry. In addition, its joint venture Hitachi Elevator is one of the top three elevator companies in China. It has stronger brand advantages, channels and after-sales installation advantages. It is expected to further increase market share and contribute considerable investment income to the company. Investment recommendations The number of elevators owned is far lower than in developed countries. We judge that the demand for elevators in newly built houses is compounded by the demand for elevators in old buildings, and the release of demand for the replacement of old elevators. The elevator market is far from peaking, maintaining our judgment that the elevator industry has ushered in an upward profit cycle. Guangri Co., Ltd. and its affiliated company Hitachi Elevator both have strong competitiveness in the Chinese elevator market and have benefited from the development of the elevator market. It is estimated that the company's operating income in 2019-2020 will be 63.26/6.959 billion yuan, net profit of the mother will be 510/570 million yuan, respectively, and the target price is 9.0 yuan/share, giving it an “increase in holdings” rating. Risk warning: 1) The construction area of real estate falls short of expectations; 2) the decline in steel prices falls short of expectations; 3) the renovation of old buildings is progressing less than expected.