The 1H20 performance is in line with our expectations. The company announced 1H20 results: revenue of 3.377 billion yuan, a year-on-year decrease of 8.3%, and net profit to mother of 183 million yuan, an increase of 7.4% year-on-year, which is basically in line with our expectations. Trend 1. Revenue for the first half of the year is under pressure and is expected to improve month-on-month in Q2. The company's 1H20 revenue fell 8.3% year on year. By product: 1) Aluminum packaging revenue fell 14.1% year on year to 1,479 billion yuan, of which two-piece cans/single-piece can revenue decreased 13.7%/21.1% year on year, respectively. Since the control of the Q2 epidemic, the beer market has recovered rapidly. We expect the company's two-piece can business to improve month-on-month; 2) Tinplate packaging revenue fell 1.7% year on year to 1,663 billion yuan. Facing the impact of the epidemic on the beverage and chemical industry, the company promptly switched to disinfectant spray cans, milk powder cans, condiments and other products to effectively smooth the impact of the decline in revenue of products such as three-piece cans; 3) Plastic packaging revenue fell 12.1% to 235 million yuan, mainly related to the impact of the epidemic on the packaging of products such as nursing and food products. In addition, sales of disinfectant and disinfectant product packaging such as hand sanitizer and disinfectant increased rapidly during the pandemic. 2. The price of raw materials has decreased, and profitability has improved. The company achieved gross profit margin of 16.3% in 1H20, up 0.7 ppt year on year. By product, the gross margin of aluminum packaging/tinplate packaging/plastic packaging increased by +0.1pp/+1pp/3.2ppt to 16.8%/16.2%/13.8% year on year, respectively. We expect it to be mainly driven by factors such as falling raw material prices and product structure optimization. The company's sales expense ratio increased by 0.1 ppt to 4.2% year on year, management expense ratio increased by 0.5 ppt to 4.6% year on year, and financial expense ratio decreased by 0.3 ppt to 1.5% year on year. Under the combined influence, the company's net profit margin increased by 0.8ppt to 5.4%. 3. Pay attention to the development trend of the two-piece can business. In 2019, the two-piece can industry achieved steady growth, driven by an increase in the canning rate of beer and increased promotion of new can types for carbonated beverages. The 2020 pandemic accelerated industry integration, compounding the decline in raw material prices. We expect the profitability of two-piece canned companies to continue to improve. As a major customer supplier such as Budweiser, Snowflake, Tsing Beer, Coca Cola, and Gadobo, the company grasps trends of high-end, differentiation, and quality on the product side, and leverages its scale advantage on the production side, which is expected to seize market share at an accelerated pace. In addition, 1H20's Fujian second-line project is operating well. The Belgian two-piece tank has completed some certification for major customers. Due to the impact of the epidemic, progress slowed in the first half of the year, and we expect volume expansion in the second half of the year. Earnings forecasts and valuations remain unchanged from earnings forecasts for 2020 and 2021. The current stock price corresponds to the 2020/2021 11x/10x price-earnings ratio. Maintaining a neutral rating and considering the recovery in the company's downstream demand, we raised our target price by 10.0% to HK$3.08, corresponding to 10 times the 2020 price-earnings ratio and 9 times the 2021 price-earnings ratio. There is 8.1% downside compared to the current stock price. Prices of risky raw materials fluctuate greatly, and orders from core customers fluctuate.