Gradually breaking out of the performance slump, business development returned to the right track, and maintained the “buy” rating. In the first three quarters of 2019, the company achieved operating income of 971 million yuan, an increase of 95.45% over the previous year; net profit was 52.8647 million yuan, an increase of 20.32% over the previous year. The company achieved positive quarterly profit growth in the first three quarters of 2019. Business operations gradually broke out of the trough, and business development returned to the right track. The company's profit for the third quarter of 2019 was slightly lower than expected. We expect the company's EPS for 2019-2021 to be 0.34 yuan, 0.50 yuan, and 0.67 yuan respectively, but considering the company's strategic layout of aviation maintenance and the development prospects of military equipment, the “buy” rating was maintained. Gross profit increased rapidly, and the period rate was reduced in the first three quarters of 2019. The company achieved gross profit of 253 million yuan, an increase of 51.08% over the previous year, maintaining the rapid growth trend of the interim report; the total period expenses were 201 million yuan, an increase of 61.50% over the previous year, and the period fee rate was 20.69%, a decrease of 4.41 percentage points. The MMRO synergy effect is obvious. The company implementing the second phase of the equity incentive plan is a leading domestic third-party aviation maintenance company. After completing the MMRO merger and acquisition, it quickly entered the segments related to aircraft base maintenance and aviation asset management in Europe. The rapid growth in revenue has largely benefited from the collaborative development of MMRO and the company's traditional main business. The company announced on October 29 that 43 incentive recipients were granted 2.87 million stock options at an exercise price of 18.02 yuan; at the same time, 120,000 share value-added rights were granted to MMRO managers. The equity incentive plan is expected to fully motivate employees and improve the efficiency and quality of subsequent business development. The technical capabilities of automated test equipment are outstanding, and the development of airborne equipment is speeding up with the downstream military helicopter industry. The company is one of the few domestic enterprises with ATE R&D and large-scale production capabilities for airborne equipment. The next-generation test system being researched and implemented is of great significance in improving the deployment capability and combat readiness rate of military aircraft. According to our military's current scale of frontline military aircraft, special combat aircraft, and transport aircraft, according to the ratio of 81 and the 2:1 backup ratio, the total scale of ATE support equipment for domestic fixed-wing military aircraft alone is over 67-101 billion yuan. China's first utility helicopter, the Direct 20, was unveiled for the first time on the 2019 National Day. With the installation of the last shortfall equipment model for Land Airlines, China's land aviation construction has reached a climax. The company is a general helicopter pilot unit, and the helicopter vibration monitoring and health diagnosis system has been certified and tested. It is expected that the development of the airborne equipment business will begin to accelerate with the installation of downstream military helicopters. Business development is back on track, and the prospects for military products are broad. Maintaining the “buy” rating has increased revenue growth and lowered gross margin and expense ratio based on the difference between the company's current operating conditions and initial assumptions. We estimate that the company's operating income for 2019-2021 will be 1,438/1,76/1,965 billion yuan (before adjustments in 2019-2021, respectively), and net profit of 0.81/1.19/161 million yuan (1.02/1.42/187 million yuan in 2019-2021 before adjustment, respectively), corresponding to EPS of 0.34, 0.50 and 0.67 yuan, respectively. We are optimistic about the strategic layout of the company's aviation maintenance and the development prospects of military equipment. According to comparable companies' average of 44.16 times PE in 2020, the company's 2020 performance is 44-44.5 times PE, corresponding to the target price of 22.00-22.25 yuan/share, maintaining the “buy” rating. Risk warning: equipment development and guarantee of new product development or delivery that does not meet expectations, aviation maintenance extension business development or does not meet expectations, etc.