Results for the first three quarters of 2019 increased 70.06% year-on-year. The company released its 2019 three-quarter report. In the first three quarters of 2019, it achieved operating income of 525 million yuan (YoY +40.05%) and net profit to mother of 80 million yuan (YoY +70.06%), which is in line with the company's previous performance forecast range. The company's deducted non-net profit for the first three quarters reached 80.2 million yuan, an increase of 95.92% over the previous year. We expect the company to achieve net profit of 145/217/284 million yuan in 2019-2021, corresponding to EPS of 1.43, 2.13 and 2.78 yuan, respectively. The target price will be raised to 57.2-62.92 yuan, and maintain the “gain” rating. Increased gross margin and lower expense ratios caused the company's profit growth rate to be higher than revenue growth. The company's revenue for the first three quarters of 2019 increased by 40.05% year-on-year, mainly due to an increase in engineering project installation revenue. The consolidated gross margin for the first three quarters was 37.61%, down slightly from 39.11% at the time of the interim report (+4.28pct); the sales expense ratio was 4.66% (YOY-2.37pct), the management expense ratio was 5.72% (YOY-1.11pct), the R&D expense ratio was 2.91% (YOY-0.09pct), and the financial expense ratio was 0.27% (YOY+0.21pct). With the exception of financial expenses, the expense ratio declined in all other periods, which was the main reason why the company's net profit growth rate exceeded the revenue growth rate. Due to the rapid increase in revenue this year, the company accrued credit impairment losses of 19.52 million yuan in the first three quarters (total asset impairment losses for the same period last year were 7.66 million yuan). The balance sheet and business scale expanded at the same time. Due to the increase in the company's project installation revenue since this year, accounts receivables/notes and inventory balances have also increased markedly. As of the end of the third quarter of 2019, the total balance of the company's accounts receivable and notes was 481 million yuan, up 47.55% from the same period last year, which is basically in line with the revenue growth rate; the company's inventory balance at the end of the third quarter reached 110 million yuan, up 114.95% from the same period last year, and up 40.28% from the end of June, reflecting a significant increase in the amount of the company's ongoing revenue to be settled, and future revenue growth can be expected. In order to meet the rapid growth of its main business, the company expanded its bank loan scale accordingly. As of the end of the third quarter of 2019, the company's short-term loan balance was 117 million yuan, an increase of 367.15% over the same period last year. The company revised the convertible bond plan The company announced that the total amount of capital raised was lowered to 209 million yuan (originally 230 million yuan). The funds raised will still be used for the Chengdu Jincheng Smart Greenway project. The total investment required for the project is 395 million yuan. Earlier, the company received feedback from the Securities Regulatory Commission on the convertible bond application. If the progress of the company's convertible bond application progresses smoothly, it will provide a solid guarantee for the development of the company's smart street lighting business, as well as more adequate potential financial support. The performance was in line with expectations, the target price was raised, and the profit forecast for the company was maintained. The company's net profit forecast for 2019-2021 is estimated to be 1.45/2.17/284 million yuan, respectively. The corresponding EPS is 1.43, 2.13, and 2.78 yuan, respectively, and the corresponding PE is 35, 24, and 18 times. Comparable company's 2019 PE valuation was 42 times. Due to the latest increase in the comparable company's valuation level, we gave the company 40-44 times the target PE in 2019, raised the target price to 57.2-62.92 yuan, and maintained the “gain” rating. Risk warning: 5G commercialization falls short of expectations, smart street lamp revenue falls short of expectations; the growth rate falls short of expectations due to fewer orders for lighting projects in “characteristic towns”; risk of declining ability to accept orders due to failure to pass grade A lighting engineering design qualification; traditional lighting business market competition is fierce, and expansion is not smooth.