Event: The company disclosed its 2020 three-quarter report. The first three quarters of 2020 achieved operating income of 1,275 million yuan, a year-on-year increase of 15.11%, a year-on-year increase of 231 million yuan, a year-on-year increase of 23.80%. Among them, Q3 achieved operating income of 462 million yuan, a year-on-year increase of 18.40%, a year-on-year decrease of 10.47%, and net profit of 85 million yuan, a year-on-year increase of 32.37%, and a decrease of 8.06% month-on-month. During the reporting period, on the one hand, the company continued to increase production capacity through endogenous epitaxial expansion, and enjoyed the economies of scale brought about by continued growth in production capacity. On the other hand, driven by the growth of high value-added business, the company's profitability continued to improve. Q3 achieved a gross profit margin of 34.41%, an increase of 1.95 pct over the previous year and an increase of 2.53 pct over the previous year. The rise of long-distance conveyors has opened up the industry's ceiling. Downstream customers of long-distance conveyors are mainly building materials companies. Alternative automobile transportation methods have two major advantages: 1) reduce safety accidents and road damage during transportation; 2) reduce transportation costs by about 50%, and the payback period of project investment is about three years. Therefore, long-distance conveyor belts now account for more than 50-60% of the incremental demand for industrial conveyor belts, which has significantly boosted the growth of the scale of the industry. Product differentiation and high value-added business continue to drive the company's profitability. The company is the number one conveyor belt company in China and the top three in the world, leading the industry in product quality and degree of differentiation. In high value-added fields such as tubular conveyor belts, the market share of the company's products exceeds 80%, and the gross margin is significantly higher than that of ordinary conveyor belts, driving the company's profitability to increase. At the same time, due to the high quality requirements of long-distance conveyors, the company benefits even more. More than 60% of the company's new revenue each year comes from the long-distance conveying business. Previously, the company had won a number of long-distance orders over 40-50 kilometers, and the order situation will continue to improve in the future. Industry concentration continues to increase, and the company will benefit greatly as a leader. The industry's high-value-added long-distance transport belt business is concentrated on leading companies. Furthermore, after several years of supply-side reforms in the downstream of the industry, the financial situation has improved, procurement volume has increased, and orders have been concentrated on leading suppliers. Back-end enterprises in the industry generally have not started enough. On the other hand, environmental requirements have greatly increased the number of small and medium-sized enterprises stopping work and production. Moreover, the upstream and downstream of the industry is very strong, the capital chain is long, and the financial pressure on small enterprises is too high. As a result, small and medium-sized enterprises generally have low start-up rates and are difficult to operate. The trend of the market share of industry leaders continuing to increase is already evident. For the company, the current market share of 10% is just the beginning. Investment advice. We believe that the rise of long-distance conveyor belts will bring high growth to the industry over a long period of time. At the same time, as a domestic and global conveyor belt leader, Shuangjian's product differentiation and quality have been recognized downstream, and it is expected to achieve high growth. We expect the company's net profit from 2020 to 2022 to be 3.05/3.56/429 million yuan, corresponding to 13.7/11.7/9.7 times PE, respectively, and maintain the “buy” rating. Risk warning: Downstream demand growth falls short of expectations, raw material prices fluctuate greatly, etc.