Guide to this report: The company's production and sales volume remained high in 2019Q3. Expenses were optimized during the period, and rising costs put pressure on performance. Macro data for October showed that real estate is resilient, and infrastructure is expected to pick up. Against the backdrop of falling high mineral prices, the company's performance is expected to pick up. Investment Essentials: Maintaining an “Overweight” rating. The company achieved revenue of 15.491 billion yuan in the first three quarters of 2019, up 0.7% year on year; net profit to mother was 240 million yuan, down 58.41% year on year; the company's Q3 revenue was 5.948 billion yuan; and the company's net profit to mother for the first three quarters was -1.94, 3.18, and 117 million yuan respectively. The company's Q3 results are still under pressure. Considering the pressure of rising iron ore prices on the cost side and the rise in industry supply exceeding expectations, the company lowered its EPS in 2019-2021 to 0.25/0.20/0.20 yuan (originally 0.25/0.32/0.36 yuan). The company was strongly expected to benefit from infrastructure recovery. The company was given a fixed premium of PB1.38X in 2019 for valuation, and the company's target price was lowered to 3.86 yuan, a “gain” rating. Gross profit per ton of steel declined, and third-quarter results were still under pressure. In the first three quarters of 2019, the company's steel sales volume was 107, 154, and 1.63 million tons, respectively. The sales price for a ton of steel was 3652, 3654, and 3654 yuan/ton, respectively; the cost of a ton of steel was 3,521, 3177, and 3275 yuan/ton, respectively; the gross profit for a ton of steel was 322, 403, and 469 yuan/ton, respectively. The company's gross profit and net profit for tons of steel in the third quarter declined compared to the second quarter. The balance ratio has continued to decline, and expenses for the period have been optimized. At the end of the 3rd quarter of 2019, the company's balance ratio was 77.62%, down 1.46 percentage points from the full year of 2018. The company's expense ratio for the first three quarters of 2019 was 7.71%, down 0.33 percentage points from the same period in 2018, and expenses for the period were optimized. Leading steel companies in Xinjiang have fully benefited from strong domestic demand for steel, and the company's performance may have picked up somewhat. 10 Macro data shows that real estate resilience still exists, while the year-on-year growth rate of fixed asset investment in China is 5.6%, which is 0.4 percentage points higher than the national fixed asset investment growth rate. Demand in the regional steel market is strong, and the company will fully benefit as a leader in the Xinjiang steel industry. Against the backdrop of falling high mineral prices, the company's Q4 performance is expected to pick up. Risk warning: The macroeconomic downturn has accelerated; supply-side increases have exceeded expectations.