Guide to this report: Q2 has become an important inflection point for demand recovery, and the trend of continuous upgrading of the product structure and expansion of the company along the forestry industry chain will continue. Investment Essentials: Maintaining an “Overweight” rating. The company released its 2020 interim report. The 2020 H1 revenue of 600 million yuan decreased by 32.21%, and net profit to mother of 28.52 million yuan decreased by 68.33%, in line with expectations. The company continues to benefit from downstream custom home furnishing development and wood-based panel industrialization trends, maintaining the company's EPS0.13/0.17/0.22 yuan forecast for 2020-2022, maintaining a target price of 4.21 yuan, and maintaining an “gain” rating. Q2 The decline in revenue has narrowed, and there may be a recovery along with the home furnishing industry. In Q2, the company's revenue in a single quarter was 457 million yuan, down 16.45% from the same period, which is significantly narrower than the 58% decline in the Q1 period, mainly driven by a recovery in demand in the downstream custom home furnishing industry. Judging H2, the company's sales will continue to be recovered as demand for home improvement continues to be released after the push. Raw materials and product structures are increasing gross profit margins, and there is a clear trend of consumption upgrading. The company's gross profit margin in Q2 was 24.81% in a single quarter, an increase of 1.4 pct over the previous year. The increase in gross margin was due, on the one hand, to a reduction in the cost of chemical raw materials, etc., and on the other hand, it benefited from an increase in the proportion of the company's consumer upgrade products such as formaldehyde-free boards. We estimate that against the backdrop of H1's total revenue decline, the absolute sales volume or decline of formaldehyde-free boards is very limited. The downstream upgrade trend is obvious, and we judge that it will continue. The loss of work stoppage affected the net profit of the mother, and the industry is growing. The absolute value of the decline in net profit due to 2020H1 is about 60 million yuan, of which shutdown costs contributed more than 20 million yuan. Sales and management expenses also increased due to the reduction in scale. The increased cost ratio H2 is expected to bring higher revenue elasticity as demand recovers. During the reporting period, on the one hand, the company continued to plan the layout of a new Super Particleboard base in Guangxi, and at the same time established a new timber supply chain company in New Zealand, which is growing along the industrial chain. Risk warning: Raw material prices fluctuate, and new projects fall short of expectations.