The impressive performance exceeded expectations. The number of students increased rapidly, and 2020H1 achieved revenue of 570 million yuan (+30.3%); the increase in the number of K12 students was the main engine of revenue growth. In the 2019/2020 school year, the total number of students enrolled in the 24 schools operating was 40,833 (+35.5%); the number of students in self-built schools was 36,480 (+34.3%); the CAGR for the past 5 years reached 36.4%. Eight new schools were added in September this year, with an estimated enrollment of over 6,700 students. The total number of students is expected to exceed 57,000. The gross profit margin was 48.2% (+4.8%). The increase was mainly due to the Group's strict control of refunds and operating expenses; the three rates remained stable, at a total of 13.0% (+1.0%); the net profit margin was 36.8% (+3.4%), and profitability continued to increase. The school network continues to expand. As of August 31, 2020, the results of the offsite expansion are beginning to be seen. The school network covers 8 provinces, including 26 self-owned K-12 schools, 6 trusted-managed K-12 schools, and 5 training schools. Enrollment in new schools from other places in the 2020/2021 school year exceeded expectations. The total enrollment of students from Rizhao and Dongying in Shandong exceeded 2,000, close to the level of existing schools in Sichuan Province. In the future, 5-10 schools are expected to open every year. The 2020H1 interest-bearing balance ratio is 17.25% (+7.53%). The future interest-bearing balance ratio is expected to remain within 30%. Currently, there is still plenty of room for financing, which can support the continued expansion of the company's school network. Ningbo Xiangshan School creates a new model of trusteeship Ningbo Xiangshan School is the group's first trusteeship public school, with more than 2,000 students enrolled. For the company, the new trusteeship model has 1) no capital expenditure, realizes asset-light operations, and obtains revenue through export management; 2) Ningbo has good economic conditions and educational environment, which is conducive to the company's strategic layout in the southeast region, enabling the company to further expand its brand influence and school network scale. Raising profit forecasts and reasonable valuation ranges, and maintaining “buying ratings” based on the company's excellent ability to run schools and strong rapid expansion capabilities, we raised the company's revenue in 2020-2022 to $12.37, 16.55, and $2,224 million; and increased net profit to $3.66, 4.61, and $600 million. The closing price on September 1 corresponds to the 2020-2022 PE forecast of 43.91, 34.89, and 26.81 times, respectively. Maintaining the “buy” rating, the reasonable valuation range was raised from HK$4.40 to HK$4.89 to HK$9.08 to HK$10.33. Risk warning: The progress of newly opened schools and enrollment progress fell short of expectations; K12 related laws and policies fell short of expectations.