Key investment points: Company announcement: Released the 2020 three-quarter report, achieved revenue of 1,114 billion yuan, an increase of 8.14% over the previous year; realized net profit of 86.92 million yuan, a year-on-year decrease of 15.14%. Among them, 2020 Q3 achieved revenue of 506 million yuan, an increase of 4.76% over the previous year, and realized net profit of 50.51 million yuan, a year-on-year decrease of 5.52%. Exceeded the performance forecast net profit limit by 8.65% (the estimated net profit limit is 80 million yuan), slightly exceeding expectations. The intensive and urgent delivery of orders for the third quarter led to a decrease in the year-on-year decline in profit for the third quarter, an increase of 152.29% over the previous month, and a gradual recovery in profitability. The company's net profit for the 2020 Q1-Q3 single quarter was 1639/2002/5051 million yuan, respectively, with month-on-month increases of -76.19%, 22.18%, and 152.29% respectively. The decline in overseas customer orders in the first half of the year and the decline in prices of some products were greatly affected by the gradual recovery of orders in the third quarter, and centralized delivery achieved a significant increase in revenue and profit over the same period last year. However, compared with the same period last year, the company's gross profit margin declined slightly. The overall gross profit margin for the first three quarters was 28.81%, down from the same period last year 10.17pct Research and development is the main focus, and the new product layout has gradually entered the trial production stage. In the first three quarters, the company spent 107 million yuan on R&D expenses, and the R&D expense rate reached 9.57%. 2020 was the company's key R&D investment period. Key R&D projects such as various folding screen phone axle hinge projects and wearable case projects entered the intensive development stage. In the third quarter, the company's new products gradually entered the trial production climbing stage, which had a certain impact on capacity utilization and affected the gross margin level, but from a long-term perspective, it helped ensure that the company's technology was at the leading level of the industry. It also raised capital through the issuance of convertible bonds to further ease the pressure on production capacity. In addition to new products based on MIM technology, research and development of the company's non-MIM products is also in an intensive period. Various projects in the cooling division, transmission division, and R&D center are continuously invested, and some cooling and transmission projects have already entered mass production. Judging from the development of the MIM industry, in the future, along with the innovation of consumer electronics products, many new demands will be placed on upstream companies. Folding screens, lifting cameras, TWS headsets, wearable devices, etc. will all place a lot of demand on MIM products. The industry will usher in explosive development, and the proportion of use in the consumer electronics field will increase. Due to the decline in the company's product prices and the decline in gross margin due to the impact of new product development, we have lowered our profit forecast. The net profit for the year 2020-2022 is estimated to be 1.54/2.09/321 million yuan (the original forecast was 2.25/288/411 million yuan), corresponding to PE 47, 34, and 22 times, respectively. We continue to be optimistic about the development trend of the MIM industry to determine the rapid growth of leading enterprises. After experiencing the painful period brought about by the expansion of production capacity and customer switching in 2018/2019, the company is expected to benefit from industry growth in the context of technology penetration and maintain buying ratings in the future.