Event Overview The company's 2020Q1-3 revenue/net income from net profit/net income after net profit of $583/-$0.83 billion was $53/-023 million, down 31.79%/56.42%/115.91% year on year. Non-recurring revenue increased by $56 million to $106 million over the same period last year. Operating cash flow/net profit was 2.88 (20H1 is -5.00, 19Q1-3 is 2.14). As business resumed after the pandemic, operating cash flow improved. Q3 single quarter revenue/net income net profit/net profit after deducting non-net profit of 3.44/0.64/0.37 billion yuan, up 2.54%/-29.02%/-52.31 percent year on year (20Q2 was down 44.92%/11.24%/97.56% year on year). Q3 revenue growth was corrected, not performance improved month-on-month. Analysis and judgment: The decline in net interest rate is mainly due to a decline in gross margin, an increase in the cost ratio, and an increase in the share of asset disposal income and non-operating income. The gross margin/net profit margin for the first three quarters of 2020 was 40.54%/14.29%, down 12.45/8.08PCT from the previous year. It was still affected by the pandemic but improved month-on-month from 26%/8% in the first half of 2020. The sales/management/R&D/finance expense ratio was 6.25%/29.07%/1.75%/6.00%, up 1.28/9.78/0.26/2.50PCT from the previous year. Management expenses were relatively rigid, but both sales and R&D expenses were reduced or delayed. Asset disposal income/revenue was 3.81%, up 3.82PCT year on year; non-operating income/revenue was 15.69%, up 5.75PCT year over year. Investment suggestions: We judge that the company was greatly affected by the epidemic in the early stages, especially the Hubei region, and overall performance was under pressure; but we also believe that driving school demand will only be delayed or will not disappear, and once the epidemic is over, the recovery elasticity is expected to be higher than that of other industries; sustainable concerns: (1) VR is expected to reduce costs; (2) aviation school training, Shandong and Wuhan subsidiaries, and testing stations are expected to become new growth points. We judge that next year's performance is flexible. The company's holding subsidiary General Aviation has announced a total of 2,017.6/ An aviation school order contract valid for 2/3 years of $62,632 million; 10.14 announcement General Aviation received China Southern Airlines's aviation school order transaction notice with an estimated turnover of 86.558 million yuan, totaling nearly 170 million yuan; (3) Currently, some regions have successively introduced policies requiring driving schools to have their own land, which is expected to accelerate industry integration. The company is also the first driving school to fully retrain and provide all tests after the pandemic, and the 70-year-old age limit for applying for small cars, small automatic vehicles, and mopeds is expected to expand the industry space. As a leading enterprise, the company is expected to benefit fully. Maintain the 20/21/22 EPS to 0.17/0.34/0.39 yuan, consider the elasticity of performance after the pandemic is over, and maintain the “increase in holdings” rating. Risk indicates the risk of declining business performance due to the pandemic; calculation of the risk of impairment of goodwill; risk of pending litigation; and systemic risk.