The core idea is to optimize the traditional construction order structure to drive improvements in profitability and repayment. With the increase in order collection capacity, traditional construction gradually gained strength. 18/19/20H1 signed a new traditional construction order of 165.8/170.6/8.19 billion, YoY -5%/+2.9%/+14.2%, which is expected to increase its share of overall revenue from 50.6% in '20 to 51.2% in '22. The company's traditional construction order structure was optimized, and the share of non-housing construction orders (higher gross margin) increased from 3.2% in 18 to 47.9% in '19, and the corresponding gross margin of traditional construction increased from 5.5% in '18 to 8.3% in '19. The trend is expected to continue. Repayments for non-housing construction projects were better, driving the parent company's revenue ratio to increase by 11pct to 107% in 2019, and net operating cash flow was corrected, which is expected to continue to improve. PPP is reviewing the current situation and is expected to enter a balance of investment in '22. The 15-17/18-19 years were affected by policy-drivening/stricter regulations, respectively. PPP experienced a period of rapid development/cooling. The company reviewed the current situation, and orders grew and contracted rapidly accordingly. As the financing environment improved marginally, the company's new PPP orders picked up, but are expected to remain at $6-8 billion. The initial preparation and construction period for PPP projects is about 0.5/3 years, respectively. As the company progresses in 16-18, it is estimated that the company's PPP investment expenditure will still be close to 7 billion dollars in 20/21, and will drop to about 3 billion dollars starting in '22. After PPP construction is completed, it will gradually enter a payback period. The company's PPP repayment is expected to exceed 3 billion yuan in '22. At that time, PPP investment cash flow is expected to improve. Starting in '22, the company's repayments can meet investment expenditure requirements, and PPP projects are expected to enter a balance of investment period. With a higher component self-sufficiency rate, the company's prefabricated engineering business is expected to grow rapidly. As a general contractor for prefabricated construction projects, the company covers all aspects of the design/manufacturing procurement/construction and installation/technical consulting industry chain, and has strong bargaining power. Under the turnkey model, the company can shorten the overall construction period by 40%, and the comprehensive cost is the same as that of a PC. The company accelerated production capacity layout and increased component self-sufficiency. On August 12, it was announced that it will build a new steel structure with a production capacity of 300,000 tons in Xuancheng (current production capacity of about 150,000 tons), which is expected to be put into operation in '21. We expect the company's decoration and steel structure revenue in 20-22 to be $13.9/22.0/3.30 billion, YoY +50.8%/57.9%/50.0%. Financial forecasting and investment advice We expect the company's 20-22 EPS to be 0.73/0.85/0.99 yuan, CAGR +14.2%. The company's traditional project construction is expected to accelerate growth, improve profitability and repayment, PPP projects are expected to enter a balance of investment period in '22, and the steel structure business is expected to grow rapidly. Referring to the average valuation of comparable companies, we approved the company's 20-year 14XPE, corresponding to a target price of 10.22 yuan. For the first time, we covered a “gain” rating. Risk warning: Order conversion rate, PPP repayment progress and amount, and steel structure business development fall short of expectations.