Q3 revenue picked up, and the leading circuit logic remained the same. On October 29, the company released its 2020 three-quarter report. The first three quarters of 2020 achieved revenue of 1,303 billion yuan, YoY -21.00%, net profit of -93.5 million yuan, YoY -257.09%, and net profit of -115 million yuan after deducting non-return to the mother. Q3 achieved revenue of 590 million yuan in a single quarter, YoY +39.74%, net profit of 1.22 million yuan, YoY -94.01%, net profit of 7.48 million yuan after deduction of net profit from non-return to mother. We believe that the logic of the big language circuit remains the same, and that the company has a first-mover advantage in terms of content and products. Currently, it is in the R&D investment period. It is continuously consolidating its moat, and there is plenty of room for future growth. The company's 2020-22 EPS is expected to be -0.08/0.32/0.58 yuan, maintaining the “increase in holdings” rating. The major language brand, products, and organizational structure were fully upgraded in the first three quarters of 2020, and the company's major language business received 292 million yuan in cash and confirmed revenue of 325 million yuan. The number of registered students was 225,151, YoY +74.23%; the cumulative number of students enrolled in the current period was 211,987, YoY +124.42%. In the first half of the year, the future of Chinese was absorbed and merged with “Mingxi Big Language” to establish the Doushen Secondary School Entrance Examination Division. The original online brand “Zhuge Academy” changed its name to “Doushen Online School”, and the big language sector was divided into four business groups: OMO, online schools, education technology, and education and culture. In the third quarter, the company fully promoted Doushen Education 4.0 products, further enriching the product line and enhancing the brand image. We believe that the company's comprehensive upgrade in terms of brand, product, and organizational structure is fully poised for later development. A new version of the fixed increase plan and equity incentive plan was launched, and the company released a new version of the fixed increase plan and equity incentive plan for the major language supplementary ammunition and stabilization team on October 23. The company plans to raise no more than 2 billion yuan from no more than 35 specific targets through inquiry and distribution. Compared with the previous version of the fixed increase plan, the fundraising scale has increased by 45%. At the same time, the 2B products “Small and Medium Institutions Online Education Ecological Service Platform Project” and “Big Language AI Evaluation System Service Platform Project” have been added to the fundraising project. At the same time, the company plans to grant a total of 18.75 million restricted shares to 70 core executives, management and technical personnel, accounting for 2.16% of the total share capital. The grant price is 9.15 yuan. The conditions for the ownership of the granted shares are at least 8.76/13.14/1,971 billion yuan, respectively. The new version of the fixed increase program and equity incentive plan will supplement the large language business with ammunition and stability teams. The leading logic of the big language circuit remains the same. Maintaining the “increase in holdings” rating, we believe that the big language circuit is still in the early stages of building content and products, and that the company's first-mover advantage requires increased investment to consolidate and improve. We believe that the attribution conditions set by the company's equity incentive plan reflect the considerations of reducing the pressure on team performance and allowing the team to focus on the correct strategic direction. They should not be viewed simply as profit forecasting guidelines. According to the three-quarter report, we lowered the revenue forecast for the major language business (other business forecasts remained unchanged). The company's net profit for the period 2020-22 is expected to be -0.72/2.77/502 million yuan (previous value: 0.52/4.36/691 million yuan), corresponding to an EPS of -0.08/0.32/0.58 yuan. The 21-year average PEG of A-shares and comparable overseas companies was 0.94 and 1.06, respectively. We lowered the company's target price range to 20 yuan (the previous value was 26 yuan), corresponding to the 2021 PEG to 0.97, maintaining the “increase in holdings” rating. Risk warning: education policy risk, poor performance risk, brain drain risk, risk of failure to effectively implement strategies of listed companies, risk of the epidemic affecting offline teaching.