Event: On October 28, the company released its three-quarter report. The first three quarters of 2020 achieved operating income of 1,774 million yuan, a year-on-year increase of 14.58%, net profit of 292 million yuan, a year-on-year decrease of 4.45%, net profit of 257 million yuan, a year-on-year decrease of 6.74%; Q3 achieved operating income of 633 million yuan, a year-on-year increase of 28.81%, and net profit of 116 million yuan, a year-on-year increase of 3.24%, a year-on-year decrease of 1.7%. The performance was in line with expectations. The revenue growth rates for Q1 to Q3 were -7.73%, +19.17%, and +28.81%, respectively. Q1 had a low capacity utilization rate due to the pandemic; Q2 resumed full production. Q3 Although orders for complete machines from major customers have decreased due to supply chain risks, on the one hand, the share of 5G mobile phone shipments has increased, and on the other hand, the resumption of work and production capacity in Indian factories is progressing and production capacity is rising, and the company's revenue growth rate is still rising month-on-month. In terms of profitability, the Q3 quarterly gross margin was 31.53%, down 6.43 pct year on year and 0.9 4pct month on month. The main reason for the decline in gross margin was a decrease in orders from major customers and a decrease in capacity utilization. The EMS market space is huge. The wave of switching, wearable and IoT terminals brought about by the 5G network upgrade are all expected to drive the EMS industry to maintain a steady annual growth rate of 5% to 10%. The downstream of the company has covered mainstream ODM and OEM customers. Currently, in order to deal with orders from major customers or risks that fall short of expectations, the company is actively expanding other new customers. At the same time, according to the announcement, the company is vigorously developing the Indian market and is currently in a stage of rapid production capacity growth. Furthermore, following India's production capacity, according to the latest announcement on October 29, the company plans to jointly invest US$120 million to establish subsidiaries in Vietnam, accounting for 51%, 24.5% and 24.5% of shares, respectively, in 3C, IoT, automotive electronics and industrial control Product development, production and sales. In April of this year, the company issued a share repurchase announcement. It plans to repurchase 1 to 200 million yuan of shares for the equity incentive plan. As of September 30, the company had repurchased 9.52 million shares, accounting for 1.23% of the total share capital. The transaction price range was 16.18 yuan/share and 18.29 yuan/share, with a total transaction amount of 170 million yuan. The share repurchase shows the company's confidence in future development and recognition of value. We believe that the company's management is excellent. As an A-share EMS scarcity target, it is expected to fully benefit from the 5G hardware update and IoT terminal release cycle. Investment suggestions: We expect the company's revenue growth rates from 2020 to 2022 to be +8.2%, +20.0%, and +25.0% respectively, and net profit of 380 million yuan, 483 million yuan, and 639 million yuan respectively, corresponding to PE 29 times, 23 times and 17 times, respectively. Maintain a buy-A rating. Risk warning: Major customers fall short of expectations; 5G demand falls short of expectations; risk of overseas outbreaks