Report summary: Event: The company released its performance forecast for the first quarter of 2020. Net profit (consolidated) attributable to shareholders of listed companies (consolidated) was 5,5764 million yuan to 7.8069 million yuan in the first quarter, a year-on-year decrease of 30%-50%. The pandemic dragged down first-quarter results, and orders recovered strongly in March. Under the impact of the COVID-19 pandemic, the resumption of work by companies and downstream industries was delayed, and logistics were also affected to a certain extent, leading to delays in the execution and delivery of ongoing orders. Revenue for the first quarter fell 20%-30% year on year. The company stepped up marketing and promotion after resuming work on February 10. Domestic orders recovered strongly in March, with a year-on-year increase of 5%. As the domestic epidemic nears its end, we believe that the company's production and operation will recover significantly, and the impact of the epidemic on the whole year will be limited. The company's customers are positioned as high-end, and there is plenty of room for import substitution. The global pressure testing and temperature calibration market is fragmented and is highly correlated with the level of industrial development and economic scale. The company's main competitors are European and American companies such as Fluke, Druck, and WIKA. The import scale of pressure testing instruments in China in 2018 was 8.213 billion yuan, and the company's domestic sales in 2018 was only 148 million yuan, so there is huge room for import substitution of high-end products. The company's customers are positioned as high-end. Domestic customers include the three major oil companies, the five major power generation groups, steel companies, provincial and municipal metrology institutes, automobile companies, railway groups, medical institutions, research institutes, food and beverage companies, etc. Overseas customers include automobile companies such as BMW and Mercedes-Benz, and leading companies in various fields such as Pfizer Pharmaceuticals, Bombardier, Airbus, Shell, and Coca Cola. A fixed increase in production and long-term growth in MEMS project layout. The company will promote a fixed increase in production expansion project and will add 30,000 pressure/temperature detection instruments per year, which will greatly alleviate the bottleneck in the company's production capacity. At the same time, the company is promoting the construction of intelligent manufacturing projects for the vertical MEMS sensor industry, with a production target of 300,000 pressure sensor cores per year. It is estimated that the annual sales revenue after delivery will reach about 819 million yuan and net profit of 205 million yuan. Company profit forecast and investment rating: We expect the company's operating income from 2019 to 2021 to be 286 million yuan, 337 million yuan and 466 million yuan respectively; net profit of 80 million yuan, 94 million yuan and 134 million yuan respectively; EPS is 0.48 yuan, 0.57 yuan and 0.81 yuan respectively, corresponding PE is 32X, 27X and 19X, maintaining a “highly recommended” rating. Risk warning: 1. Production expansion and MEMS project construction fall short of expectations; 2. Downstream demand falls short of expectations.