Company announcement: 2020Q1-Q3 revenue is 1,303 million yuan/ -1.65%, net profit of the mother - 93 million yuan/ -257.09%, net profit of non-return mother - 115 million yuan/ -288.12%; Q3 single quarter revenue is 590 million yuan/ +39.74%, net profit of 1.22 million yuan/ -94.03%, net profit of 7.48 million yuan/ -131.74%. The second and third quarters led to a gradual recovery in revenue, and the profit level for business expansion declined. The company's 2020 Q1/Q2/Q3 revenue was -71.87%/+33.97%/+39.74% year-on-year. Driven by the second and third quarters, revenue for the first three quarters was 1,303 billion yuan/ -1.65%, which has basically recovered to the same period last year. 2020Q1-Q3 management expenses are 230 million yuan/ +31.37%, mainly due to a sharp increase in labor costs, which had an impact on net profit in the first three quarters. At the same time, the gross profit margin of 2020Q3 sales was 25.23% /-21.03pct. The gross margin level declined markedly due to business expansion, which affected the company's net profit in the third quarter. The major language business resumed in an orderly manner, and the driving effect of online business in the third quarter was obvious. In previous years, the peak registration period for major language services in the first half of the year was 4-6 months, but this year it was delayed until July-September due to the influence of prevention and control. As the situation eases, business in various regions is returning to normal. By the end of the reporting period, the number of students enrolled in the fall nationwide had exceeded the same period last year. The number of students enrolled in 2020Q1-Q3 was 2251,000, +74.23%; the cumulative number of students enrolled in the current period was 212,200 million/ +124.42%; the number of students enrolled in 2020Q3 was 108,500, +77.96%, and the cumulative number of students enrolled in the current period was 94,600, +121.79%. With the booming development of the online business, the confirmed revenue of the online business in the third quarter and the number of registrations in a single quarter have already exceeded the sum of the first and second quarters, and the driving effect is obvious. The new online six-person class performed well. The online six-person class business was added this year. Famous teachers will conduct large classes, tutors will provide small class services, and tutors will answer questions one-on-one in a 6-person class group. The total number of students enrolled in the third quarter was 6,801, with a customer unit price of 11,400 yuan, which is the same as the offline branch business. Currently, the number of students enrolled in the next month increased by about 10%. If you include the ranking of all city branches in the country, it is ranked second in size, second in size, second in number in the number of students, and number one in the growth rate. According to the current growth rate, the company expects the number of students enrolled in the Beijing branch next fall to reach the total number of students in all schools outside of Beijing; the company expects this business to contribute 150 to 250 million yuan in revenue in 2021. The integration of Mingxi Language is expected to be completed next year. In the first half of 2020, the company successfully undertook Mingxi's big language resources, and it is still in the integration period. Some students began normal renewal in September 2020. The number of long-term students during the reporting period was 2,793. The number of long-term students during the reporting period was 2,793. The number of students has not yet been recorded in the statistics of the number of students. It is expected that 2021 will return to normal and confirm income and numbers. Profit forecast: The revised fixed growth plan will raise capital on a larger scale. New projects can further improve the company's product matrix and enhance technical capabilities, thus establishing higher barriers to competition. The incentive plan helps to deeply bind core employees and motivate them to work with high returns and high requirements to improve the company's performance. Doushen Education has obvious advantages in teaching content as the leading language racetrack. Recently, efforts have been made to build a deeper moat with IP and platforms, and active attention is recommended. Maintaining the profit forecast, the EPS for 20-22 is expected to be 0.10/0.28/0.42 yuan, and the corresponding PE price on October 29 is 143/51/34 times, maintaining the “prudent increase in holdings” rating. Risk warning: fixed growth plan risks, online business falling short of expectations, franchise business falling short of expectations, business divestment risk, etc.