Event: Liu He attended the fourth meeting of the State Council's State-owned Enterprise Reform Leading Group and the National State-owned Enterprise Reform Three-Year Action Mobilization and Deployment Video-teleconference and delivered a speech. The comments on this are as follows: The three-year action for state-owned enterprise reform is a concrete construction plan for implementing the “1+N” policy system and top-level design for state-owned enterprise reform over the next three years. It is measurable, assessable, verifiable, and actionable. On September 27, the fourth meeting of the State Council's State-owned Enterprise Reform Leading Group and the National State-owned Enterprise Reform Three-Year Action Mobilization and Deployment Video-teleconference were held in Beijing. Liu He, member of the Political Bureau of the CPC Central Committee, vice-premier of the State Council, and head of the State Council's State-owned Enterprise Reform Leading Group, attended the meeting and delivered a speech. State Councilor and Vice Chairman of the State Council's State-owned Enterprise Reform Leading Group Wang Yong presided over the meeting. The conference pointed out that General Secretary **** attaches great importance to the reform of state-owned enterprises and has issued important instructions and instructions many times, which must be thoroughly studied and implemented. The three-year action for state-owned enterprise reform is a concrete construction plan for implementing the “1+N” policy system and top-level design for state-owned enterprise reform over the next three years. It is measurable, assessable, verifiable, and actionable. Doing a good job in this work is of great significance in strengthening, improving and expanding the state-owned economy, enhancing the vitality and efficiency of state-owned enterprises, and speeding up the construction of a new development pattern. Through the implementation of the three-year action, the optimization of the layout and structural adjustment of the state-owned economy will be promoted, and the vitality and efficiency of state-owned enterprises will be enhanced. The conference demanded that through the implementation of the three-year action, obvious results should be achieved in forming a more mature and more structured modern enterprise system with Chinese characteristics and a state-owned assets supervision system focusing on capital management, promoting optimization of the layout and structural adjustment of the state-owned economy, and enhancing the vitality and efficiency of state-owned enterprises. The conference emphasized the need to strengthen implementation of departmental responsibilities, establish a responsibility system, give full play to local enthusiasm, creatively implement plans, give full play to the entrepreneurial role of heads of state-owned enterprises, and promote the effectiveness of state-owned enterprise reform. First, state-owned enterprises should become market players with core competitiveness. State-owned enterprises must first perform their economic functions, create market value, and better serve the Party and the people. It is necessary to strengthen the Party's leadership, implement the powers of the board of directors, improve market-based management mechanisms, and actively and steadily deepen mixed ownership reform. Second, it is necessary to play a greater role in leading innovation. Innovation determines fate, and hard power unblocks the cycle. We should use innovation as a breakthrough, boldly and fully incentivize, and do more in areas such as research on key core technologies, introduction of high-end talents, and transformation and application of scientific research results. Third, it is necessary to play a leading role in raising the level of the industrial chain supply chain. State-owned enterprises should play a driving role and an important influence on the healthy development of private enterprises. Promote the formation of a relatively good market structure according to the concentration requirements of different industries. State-owned enterprises and private enterprises should cooperate with each other to promote mergers, restructuring, and strategic combinations. Central enterprises should resolutely reduce management levels and prevent and control all types of risks. Fourth, it should play a special security role in safeguarding the livelihood of the public and dealing with major challenges. It is necessary to promote state-owned capital to play a greater role in key areas related to the national economy and people's livelihood, such as the provision of public services, emergency capacity building, and public welfare, and make good institutional arrangements. For state-owned enterprises to undertake public welfare services, classification accounting and classification assessments must be carried out. Establish and improve a subsidy system in line with international practices. Fifth, it should play a fundamental role in maintaining the country's economic security. We must insist on progress, retreat, and inaction, and promote the concentration of state-owned capital in important industries and key areas relating to national security and the lifeblood of the national economy, so that state-owned enterprises can truly play a supporting role in resisting macro-risks. On July 14, the controlling shareholder of the company changed to China Railway; on August 20, the company's abbreviation was changed to China Railway Assembly, and a new general manager was appointed. On July 14, 2020, the subject shares transferred by the agreement on the change of control have completed the transfer procedure, and the controlling shareholder of the company was changed to China Railway. On August 1, 2020, the company announced that it intends to change the company's abbreviation to China Railway Assembly. On August 20, the company abbreviation change was completed. On the same day, the company appointed Mr. Sun Baoliang, the new general manager. From April 2014 to July 2020, Mr. Sun Baoliang served as Deputy General Manager and Financial Director of China Railway Real Estate Group Co., Ltd. China Railway's acquisition of Hengtong Technology is expected to create a successful example of mixed reform and open a new chapter in the improvement, strength, and expansion of China Railway's prefabricated construction sector. On July 15, the handover ceremony for China Railway Co., Ltd. to acquire control shares of Beijing Hengtong Innovation Saimu Technology Co., Ltd. was held in Shenzhen. The two sides signed the “Stock Exchange Memorandum”. Yu Tengqun, member of the Standing Committee of the China Railway Party Committee, Vice President and General Counsel, Sun Zhiqiang, Chairman of Hengtong Technology, and Luo Huaming, Vice Chairman of the Bank of China Securities Investment Committee, delivered speeches on behalf of the trading parties and intermediaries respectively. In his speech, Yu Tengqun said that China Railway is the world's largest infrastructure construction group, and Hengtong Technology is an excellent private enterprise. This merger and acquisition will definitely have a positive impact on the development of the prefabricated construction industry. Stock exchange is only the first step in a long march. From now on, the two sides should jointly create a broad field of cooperation by promoting restructuring and integration, resource sharing, and complementing each other's strengths and weaknesses, achieve mutual benefit, win-win, and collaborative development, create a successful example of mixed reform, and open a new chapter in improving, strengthening and expanding the prefabricated construction sector of China Railway. This merger and acquisition is a major decision made by both parties based on future industry development. After the transfer was completed, China Railway obtained control of Hengtong Technology. China Railway will firmly support Hengtong Technology's intensive work in the main field of prefabricated construction, focus on building a high-tech innovative prefabricated construction business platform for China Railway with Hengtong Technology as the main body, further complement and improve China Railway's main business service capabilities, and promote the upstream and downstream collaborative development of the entire company's construction industry. Investment advice: Maintain an increase in holdings rating. The company's net profit from 2020 to 2022 is expected to reach 0.82, 1.08, and 143 million yuan respectively, up 22%, 32%, and 32% year on year, corresponding to price-earnings ratios of 47, 36, and 27 times. The prefabricated construction industry is currently supported by policies, and the industry is in a period of high growth. The company's production base in Suqian, Jiangsu was successfully put into operation in the first half of 2019, improving production capacity layout. The company's technology and ability to receive orders are strong; after the controlling shareholder becomes China Railway, it is expected that business collaboration will be achieved. Risk warning: Policy support for the prefabricated construction industry falls short of expectations; industry competition intensifies; downstream demand for prefabricated construction falls short of expectations; raw material cost growth is higher than expected; business support brought to the company by China Railway falls short of expectations; impairment losses or intensification of assets such as bad debts.