Event: In the first three quarters of 2020, the company achieved operating income of 266 million yuan, a decrease of 44.7%, net profit of 102 million yuan, an increase of 22.3%, net profit after deduction of 21,1063 million yuan, a decrease of 75.2%. Comment: Megem and Kaide improved month-on-month. In the first three quarters of 2020, non-current asset disposal profits and losses were achieved at 101 million yuan, mainly from the investment income of the disposal subsidiary Third Base Technology. The divestment of Third Base Technology contributed about 84 million yuan in profit. The education business was affected by the epidemic at home and abroad. We estimate that Megam contributed about 35 to 40 million yuan in net profit in the first three quarters, and Kaide Education contributed about 10 million yuan in net profit. It can be seen that Q3 has shown a clear positive trend compared to Q2. Reduced revenue has led to higher expense ratios. In the first three quarters of 2020, the sales expense ratio increased by 2.68pct to 9.67%, the management expense ratio increased by 10.13pct to 30.11%, the R&D expense ratio decreased by 0.33pct to 2.36%, and the financial expense ratio increased by 1.40pct to 2.61%. Investment suggestion: The company's early education and study abroad training business Q3 has shown a clear positive trend compared to Q2. The original business has been divested, and the future will focus on the development of the education business. The net profit forecast for 2020 to 22 was adjusted to 1.36/1.76/201 million yuan, corresponding to a valuation of 43x/33x/29x. They are optimistic about the company's leading position in the early childhood education industry and maintain the “buy” rating. Risk warning: The recovery of early childhood education business after the pandemic did not meet expectations, and the study abroad training business continued to be affected by the overseas epidemic.