We expect the company's net profit to be 10.99 (-2.89), 14.07 (-1.82), and 17.23 (-2.00) in 2019-2021, mainly due to delays in lowering revenue growth expectations and gross margin recovery expectations for 2019-2021. From January to October 2019, China's elevator production increased by 14.4%, and the total profit of the elevator industry increased by 26% from January to September. The elevator industry continued to recover, and there was a “steady increase in volume and price”. Based on the continued recovery in demand in China's elevator industry in the future, it is expected that the recovery in the company's gross margin in 2020 will drive a rebound in profit growth to mother, and the valuation is far lower than comparable companies and book cash of over 5 billion yuan, maintaining a “highly recommended” rating. “Stable volume and price growth” drove the total profit of the elevator industry to increase 26% in the first three quarters of 2019. According to KONE Group's three-quarter report, competition in the Chinese elevator market was still fierce in the first three quarters of 2019, but the pricing of the new equipment market was quite stable. We believe that the recovery trend of China's elevator industry has continued since 2019. New orders and revenue from leading companies have all improved compared to 2018, and elevator prices in China are expected to bottom out in 2019. According to data from the National Bureau of Statistics, from January to October 2019, China's elevator and lift production was 955,000 units, up 14.4% year on year; in the first three quarters of 2019, the total revenue of elevator companies above the size of China was 195.6 billion yuan, up 10.94% year on year, and total profit was 13.448 billion yuan, up 25.83% year on year. It is expected that “stable volume and price increases” may accelerate the recovery of Shanghai's Mechatronics net profit in 2020. It is estimated that in 2020, Shanghai Mitsubishi's elevator production will exceed 100,000 units, with a compound growth rate of about 10%, and Shanghai Mitsubishi's cumulative sales volume of about 1 million units. As Mitsubishi's elevator stock continues to increase, self-maintenance rates increase, and upgrading projects increase, etc., the compound growth rate of elevator service revenue is expected to exceed 10% in 2020-2021. The month-on-month decline in the company's gross margin of 2019Q3 narrowed to 0.17 percentage points in a single quarter. We expect that with the carry-over of previous orders, the bottom of sales prices for new elevators in China in 2019, and the decline in steel prices, etc., the gross margin of mechanical and electrical machinery in Shanghai is expected to rise quarterly in 2020, thus driving up operating profit margins and an accelerated recovery in net profit to the mother. Pessimistic expectations have been reflected, and the valuation is far below the average of comparable companies. We strongly recommend that we believe that the current Shanghai Electromechanical stock price reflects the company's revenue and net profit growth expectations in 2019, and the worst period has passed. As of November 30, 2019, the arithmetic average PE of the 4 A-shares and 2 foreign listed comparable companies was 23.19 times and PB (LF) was 3.67 times, which is significantly higher than the Shanghai Electromechanical valuation. Based on the “steady increase in volume and price” of the Chinese elevator industry or the accelerated recovery of Shanghai Mitsubishi's net profit in 2020 and the disposable cash of Shanghai Electromechanical's parent company exceeding 5 billion yuan, it still maintains a “highly recommended” rating. Risk Warning: Prolonged real estate and infrastructure construction cycles; risk of credit impairment of accounts receivable