Performance bucked the trend and increased significantly. In line with expectations, H1 achieved revenue of 2.76 billion yuan, +9.51% year on year, net profit to mother of 426 million yuan, +56.15% year over year, and EPS of 0.89 yuan/share, in line with previous performance forecasts. The company achieved revenue of 1,797 billion yuan in a single quarter, +18.9% year-on-year, and a positive month-on-month increase. Net profit to mother was 443 million yuan, +35.1% year-on-year. The increase in performance was mainly due to a year-on-year increase in sales volume and prices, and better control of costs and expenses. Volume and price rose sharply. Various indicators optimized H1's cement and clinker sales volume in 2020 was 6.6042 million tons, +3%. The tonnage revenue, ton cost, and gross profit per ton were 330 yuan, 208 yuan, and 121 yuan respectively, up 6.4%/3.6%/11.5% year-on-year respectively. The price increase was mainly due to the continuous recovery of downstream demand in the Gan, Ning, and Inner Mongolia regions where the company is located since the second quarter. The supply and demand pattern improved, and prices rose to historic highs. The three expense ratios together decreased by 3.21 percentage points year over year, mainly due to lower sales and transportation expenses and reduced interest-bearing liabilities, which led to a decrease in interest expenses. Benefiting from increased gross profit and good cost control, net interest rate reached 21.3%, an increase of 5.7 percentage points over the previous year. During the reporting period, the company's net cash increased by 319 million yuan to 385 million yuan year-on-year, the balance ratio fell to 21.46% for three consecutive years, and the debt structure continued to be optimized. False peak replacement optimizes the supply pattern. Demand in the second half of the year may accelerate the release of the supply pattern optimization in Ningxia in the first half of the year. In April, Inner Mongolia announced a false peak replacement plan for calcium slag clinker companies. The situation in cement price depressions in Ningxia improved. The average price of cement in Yinchuan increased by 28.7 yuan/ton over the same period last year. On the demand side, by the end of July, the restart rate of major projects in Ningxia reached 89.9%, completing the annual plan of 50.8%, and the fixed asset investment growth rate ended negative growth in 28 months, achieving a growth rate of 0.5%. The growth rate was 1.3 percentage points faster than in the first half of the year, and 2.1 percentage points higher than the national average. As the peak season approaches, the impact of the epidemic weakens, and downstream demand may be released at an accelerated pace in the future. The commissioning of the new production line is expected to increase the company's performance. Maintaining the “buy” rating company is Ningxia's leading cement company, with a market share of nearly 50%, high brand influence, and continuous improvement in business quality. In March 2018, the company shut down 4 clinker production lines and began trial production of a new 5000t/d production line with a reduction in volume, which is expected to increase the company's performance. EPS is expected to be 2.2/2.5/2.6 yuan/share in 20-22, corresponding PE is 7.8/7.1/6.7x, maintaining a “buy” rating. Risk warning: The economic decline exceeded expectations; the regional supply pattern deteriorated; project implementation fell short of expectations.