Key investment performance summary: The company released its 2020 quarterly report, achieving revenue of 520 million yuan (-29.9%), net profit of 5.76 million yuan (-80.4%), net profit of 5.76 million yuan (-80.4%), and non-net profit of 3.93 million yuan. On March 30, 2020, the company predicted net profit for Q1 to be 4 million to 6 million yuan. The first quarter report was in line with expectations. In the short term, it was greatly affected by the epidemic, and performance declined. Affected by the epidemic, the commencement of construction of downstream real estate, etc. was delayed, and the elevator industry was greatly adversely affected. According to data from the National Bureau of Statistics, the production of 2020Q1 elevators, escalators and elevators was 149,000 units (-20.7%), a sharp decline. The company was adversely affected by the industry, and Q1 revenue fell 29.9%. The company achieved a gross profit ratio of 27.6% (+0.7pp) in Q1, mainly benefiting from lower raw material costs. The company's cost rate for the Q1 period was 25.6% (+5.2pp). Among them, the sales expense ratio was 13.2% (+0.7pp), the management expense rate was 11.8% (+4pp), and the financial expense ratio was 0.6% (+0.5pp). The company's management expense ratio increased significantly, mainly due to the rapid decline in revenue scale and the relative short-term rigidity of the absolute amount of management expenses. Affected negatively by the pandemic in the short term, steady growth can be expected throughout 2020. Affected by the novel coronavirus epidemic, the resumption of work by the company and upstream and downstream industries was delayed, which had a negative impact on the company's production and operation in the first quarter of 2020. However, the commencement of downstream real estate, rail transit and other projects has been delayed, and demand is still ongoing, and the impact is not expected to be significant throughout the year. As of December 31, 2019, the valid orders being executed by the company were 5.94 billion yuan (+9.2%), excluding the Beijing New Airport section of the intercity railway link line that has won the bid but has not received a deposit, Suzhou Rail Transit Line 5, Jinan Rail Transit R2 Line, the construction of the Beijing-Shenyang Railway Special Starfire Station and hub project, the renovation project of the Beijing Railway Hub Fengtai Station, Nanchang Rail Transit Line 3, Yinchuan-Xi'an Railway (Shaanxi section), with a total bid amount of 367 million yuan. Strong growth. Profit forecasts and investment advice. The company is the leading elevator brand in China, and continues to make breakthroughs to ensure performance growth. It is estimated that the EPS in 2020-2022 will be 0.36/0.41/0.48 yuan, and the corresponding PE will be 25/22/19 times, respectively, maintaining the “hold” rating. Risk warning: Downstream demand falls short of expectations; price falls short of expectations; risk of raw material price fluctuations.