The core view was influenced by the long rainy season, and the performance fell slightly short of expectations. During the reporting period, the company achieved operating income of 14.83 billion yuan, YoY -8.1%, net profit of 570 million yuan, and YoY -9.3%. Among them, Q3 achieved revenue/net profit of 4.77/190 million in a single quarter, YoY -0.5%/-1.2%. The performance was slightly lower than expected. We judge that the progress of the company's construction project has slowed down mainly due to the long rainy season in July. Prudence in taking orders for PPP projects has led to a slowdown in overall new orders received. During the reporting period, the company received 14.88 billion new orders, YoY +29.4%, of which Q3 received 3.21 billion new orders in a single quarter (all traditional construction projects) and YoY -25.8%. The overall order volume slowed down mainly due to the company's caution in taking PPP orders. The company has sufficient orders in hand. As of the end of the 3rd quarter, we estimate that the company's traditional project construction/PPP project construction unfinished orders were about 510/29 billion, respectively, and performance growth is guaranteed. Profitability increased, and cash flow continued to improve. The company's gross margin/net profit margin during the reporting period was 10.5%/3.9%, up 1.3/0.1pct year-on-year, mainly due to 1) the increase in profitability brought about by the optimization of the company's traditional construction project structure; 2) the increase in the company's PPP projects entering the operation stage, and the share of investment business revenue in PPP projects with high gross margin increased. The company's period expense ratio was 3.42%, an increase of 0.73 pct over the previous year. Among them, the management/R&D/finance expense ratio increased by 0.21/0.18/0.37 pct respectively. The company's net operating cash flow during the reporting period was 230 million yuan, a significant improvement over the same period in '19 (-1.27 billion). We believe it is mainly due to 1) the increase in the share of public construction projects and the improvement in repayment; 2) the company strengthened the recovery of project security deposits. The order structure is optimized, and the growth of the steel structure business is expected to accelerate. The share of non-Chinese housing construction orders in the company's construction projects has increased, and the number of government/state-owned enterprise customers has increased, driving increased profitability/improved repayment. The peak of investment in PPP projects has passed, and cash flow will improve at an accelerated pace in the future. The company's steel structure business is speeding up production capacity layout. It is expected that the Xuancheng steel structure production line will be put into operation in '21, and the steel structure business is expected to experience rapid growth. Financial forecasts and investment recommendations We expect the company to have an EPS of 0.67/0.79/0.93 for 20-22 (previously 0.73/0.85/0.99 yuan). Considering that the company is affected by the long rainy season, the order conversion rate for PPP projects/traditional projects in 2020 was reduced to 9.1%/27.0% (previously 11.6%/29.0%). The company's share of non-housing construction orders has increased, driving improvements in profitability and repayment, and the steel structure business is expected to grow rapidly. Referring to the average valuation of comparable companies, we approved the company's 20-year 13XPE, corresponding to the target price of 8.71 yuan, maintaining the “increase in holdings” rating. Risk warning: order conversion rate, PPP payment progress and amount, steel structure business development falls short of expectations.