Core view: 2020 is the first year of global 5G commercialization and the “big year” of Apple's innovation. A new wave of switching is expected to stimulate an overall recovery in demand for metal structural components in consumer electronics. The company's performance elasticity is expected to increase, and at the same time, the profitability recovery is extremely elastic. A high-tech precision metal manufacturing enterprise, deeply involved in the downstream consumer electronics industry. The company's revenue increased from 405 million yuan to 2,408 million yuan in 2014-2018, with a CAGR of 35.96%. Among them, mobile phone and tablet structural components are the main source of revenue, accounting for more than 80%. The products are used in internationally renowned customer terminal products such as Apple, Sony, and Lenovo. The company is also developing medical surgical instruments (core customer Medtronic), photovoltaic product structural parts (core customer Solar City) and e-cigarette businesses, expanding the product structure, and opening up downstream application scenarios through the versatility of metal parts processing technology. The industry's boom cycle begins, and performance is expected to increase significantly: as Apple's core supplier, the company lays out stainless steel/aluminum iPhone frames, metal pencil parts, Macbook and iPad metal parts. 2020 is a decisive year for 3C. The wave of switching will drive a sharp increase in the elasticity of demand for upstream metal structural parts, and the company's performance is expected to bottom up. At the same time, the company's products are expected to break through new customers and open up space! The large inventory calculation in '19 dragged down performance. New management was put in place, and equity incentives were implemented, demonstrating the company's confidence in transformation: the company's management expenses rate was high in the first three quarters of '19, and at the same time, the company's one-time inventory depreciation in 2019 was 42 million, which greatly dragged down performance. At the end of '19, the new general manager came from Apple supplier Herbie International. The company's operation and management capabilities and market development are expected to accelerate, and the profit margin inflection point is highly certain. Profit forecast: The company's revenue for 2019-2021 is 20.99 billion yuan, 31.52 billion yuan, and 4.364 billion yuan, respectively, corresponding to net profit attributable to mother - 1.92, 203 million yuan, and 301 million yuan. The company was given 40 times the PE valuation in 2020, with a target price of 19.20 yuan. The first coverage (Huaxi Machinery & Electronics Joint Coverage) was given a purchase rating. Risk warning 1) Risk of fluctuations in the downstream industry; 2) Risk of fluctuations in the company's performance as downstream products are updated; 3) Risk of customer concentration.