Incidents: The company recently released its 2019 annual report. During the reporting period, the company achieved operating income of 1,291 billion yuan, up 28.87% year on year; net profit attributable to the parent company was 155 million yuan, up 18.63% year on year; basic earnings per share of 0.22 yuan, up 22.22% year on year; the company's gross profit margin and net profit margin were 34.29% and 11.84%, respectively, down 0.71 pct and 1.06 pct year on year. Investment points: The main garage business is growing steadily, and the parking lot operation sector has broad prospects: in 2019, the company's main garage and its installation service business achieved revenue of 817 million yuan (YoY +31.50%), accounting for 63.28% of revenue, which is an important foundation for the company to achieve continuous business growth. In 2019, the company's parking lot operation business achieved revenue of 5.17 million yuan, a significant increase of 135.89% over the previous year. Currently, the company's parking lot operation business is in the early stages of development, and there are broad prospects for future development. In 2019, the company made an overall acquisition of Changan Parking, using this as an opportunity to build the investment and operation sector of Wuyang Parking, and promote the company's transformation from an equipment manufacturer to an integrated service for investment, construction and operation. Inventory growth confirms that the company has sufficient orders in hand, and the impact of the epidemic will weaken marginally: the company's inventory balance in 2019 was 437 million yuan, an increase of 44.33% over the previous year. The company mainly uses a market-based production model, and the sharp increase in inventory confirms that the company has sufficient orders in hand. Affected by the COVID-19 pandemic, the net profit of the company in Q1 is expected to decrease by 20.71% to 34.87% year-on-year in Q1 in 2020. As the upstream and downstream resumption of work and production progresses steadily, the company's business conditions are expected to gradually improve. The development of the mechanical parking equipment market has entered the fast track: as the number of cars owned continues to grow, the problem of parking difficulties is already a livelihood problem that governments at all levels must solve, and the three-dimensional parking business is an effective means of solving the supply of parking spaces in cities. The original pattern of supporting construction for real estate agents has gradually changed, the pace of parking lot construction with government and social capital as investors is getting faster and faster, and the three-dimensional parking market has entered a rapid development path. On April 3, 2019, the Ministry of Housing and Construction held a meeting to encourage real estate development enterprises to participate in the renovation of old neighborhoods. Among them, spare parking lots are the key direction of the renovation of old neighborhoods. According to information from the Ministry of Housing and Construction, there are about 170,000 old urban neighborhoods to be renovated in China, and the demand for related mechanical parking equipment is vast. Profit forecast and investment advice: We expect the company's net profit in 2020, 2021 and 2022 to be 180 million yuan, 233 million yuan, and 281 million yuan respectively, maintaining the company's “increased holdings” rating. Risk factors: risk of production capacity falling short of expectations, risk of increased market competition, risk of parking project construction falling short of expectations, risk of impairment of goodwill, risk of policy changes.