The company released its 2020 three-quarter report. It achieved revenue of 3.87 billion yuan for the first three quarters of 20 years, +6.7% year over year, net profit to mother of 820 million yuan, +34.8% year-on-year; realized net profit of 770 million yuan without return to mother, +40.5% year over year. The rapid increase in profit mainly benefits from lower production costs, higher gross margins, and further improvements in cost ratios due to the commissioning of new production lines. The company's net cash inflow for Q3 operating activities was 340 million yuan, up 9.7% year on year. The company's fixed investment in the Ningxia region supports steady growth in demand. We continue to be optimistic about the gradual implementation of false peak replacement, which will help improve the medium- to long-term supply and demand pattern in the company's core market, and is expected to break the regional price ceiling in the future. Maintain the company's 20-22 EPS forecast of 2.30/2.66/2.88 yuan, target price of 23.00 yuan, and maintain the “gain” rating. Q3 revenue grew steadily year on year, and cost decline led to an increase in gross margin. The company achieved revenue of 1.70 billion yuan, +3.3% year over month, and -5.6% month on month, achieving net profit to mother of 370 million yuan, +17.5% year over year, and -10.9% month on month. Q3 revenue and net profit continued to grow year on year. We expect the company's Q3 volume and price to be basically stable year on year. The company's Q3 gross profit margin was 41.1%, up 3.0 pct year on year, and further increased by 0.7 pct over the previous month, mainly due to the company Wu Zhong Horse Racing's new dry cement production line with a daily output of 5,000 tons, which led to a decrease in unit consumption and labor costs. According to the National Bureau of Statistics, fixed asset investment in Ningxia increased 2.6% year-on-year in the first three quarters of 20 years, which was significantly higher than the national level (0.4%). Improved downstream investment supported the company's rising demand. The decline in the expense ratio further boosted the net interest rate. The Q3 expense ratio of the operating cash flow optimization company was 11.5%, down 1.4 pct year on year. Among them, the sales/management/finance expense ratio decreased 0.9/0.2/0.3 pct year on year, and the improvement in the cost situation further boosted the net interest rate. The Q3 company's profit margin was 23.3%, up 2.8 pct year on year. At the end of September, the company's interest-bearing debt balance was 380 million yuan, down 110 million yuan from the beginning of the year. The balance ratio was 21.9%, -6.8 pct. The balance and liability structure was further optimized compared to last year. By the end of the third quarter, the balance of the company's accounts receivable and notes was 770 million yuan, a significant improvement from 1.52 billion yuan in the same period last year, reflecting a further strengthening of the company's accounts receivable management capabilities. The company's Q3 net operating cash flow inflow was 340 million yuan, up 9.7% year on year. Maintaining profit forecasts, maintaining the “increase in holdings” rating company is the largest cement manufacturer in Ningxia. Benefiting from improved regional supply and demand patterns and increased profitability brought about by lower costs and expenses, net profit increased rapidly in the first three quarters. We believe that the consolidation of China Building Materials cement assets will drive the further development of the regional supply and demand pattern. At the same time, the effects of the Mengxi Cuofeng replacement are expected to gradually become apparent, and the cement price ceiling in the company's core regional market is expected to be broken. We maintain the company's 20-22 net profit forecast of 1,10/12.7/1.38 billion yuan. Currently, comparable companies correspond to the 20-year Wind consensus average of 7.3xPE. Considering that production efficiency is further optimized after the company's new production capacity is put into operation, and there is relatively high room for profit improvement, we approve giving the company a 20-year 10xPE with a target price of 23.00 yuan, maintaining a “gain” rating. Risk warning: Increased competition in the industry has led to a decline in profitability, and a sharp rise in raw material prices has led to an increase in production costs.