The performance growth rate continued to recover in the first three quarters, and slowed quarter-on-quarter in the third quarter. In the first three quarters of 2020, the company achieved operating income of 14.827 billion yuan, a year-on-year decrease of 8.07%; net profit attributable to shareholders of listed companies was 569 million yuan, a year-on-year decrease of 9.26%, and the decline was 3.5 pcts narrower than in the first half of the year. On a quarterly basis, Q1/Q2/Q3 achieved revenue of 47.2/53.3/4.78 billion yuan, a year-on-year change of -19%/-3%/-0.5%, and net profit to mother of 1.8/2.0/ 190 million yuan, respectively, an increase of -30%/12%/-1.2%. The slight decline in single-quarter results in the third quarter was mainly due to lower revenue, increased financial expenses, income tax expenses, and minority shareholders' earnings. The gross margin increased markedly, and the operating cash flow situation improved dramatically. The company's gross profit margin for the first three quarters was 10.45%, up 1.34 pcts from the same period last year. It is expected to be mainly due to an increase in the company's share of infrastructure and government projects, a marked improvement in the business structure, and an increase in the gross margin of traditional civil construction. The cost rate for the period was 3.42%, up 0.73 pcts from the same period last year. Among them, the sales/management/development/finance expense ratio changed by -0.03/+0.21/+0.18/+0.37 pcts respectively. The increase in the management fee rate was mainly due to the impact of the epidemic; the increase in the financial expense ratio was mainly due to increased bank financing approvals and withdrawals of funds. Asset (including credit) impairment losses were approximately 86 million yuan, a decrease of 24 million yuan compared with the same period last year. The net profit margin was 3.84%, a slight decrease of 0.05 pct from the same period last year. The net operating cash flow inflow for the first three quarters was about 233 million yuan, compared with a net outflow of 1.27 billion yuan in the same period last year, mainly due to a decrease in net expenditure on PPP projects, an improvement in repayment conditions for newly launched construction projects after optimizing the business structure, and at the same time, the company stepped up efforts to clear debts on old housing construction projects. The new order structure was optimized, and PPP project payback increased dramatically. From January to September 2020, the company and its subsidiaries signed a total of 14.888 billion contracts, an increase of 29.35% over the previous year. The company announced that private investment projects in China and Africa accounted for 53.81% of new orders in the first half of the year, and the business structure continued to improve. The company signed a total of 3.476 billion yuan of new PPP projects this year, accounting for 23% of new contracts. The company actively adjusted according to the industry situation and selected high-quality PPP projects. The company currently has sufficient PPP projects in hand, and some projects have gradually entered the repayment period. It was announced that in the first half of the year, a total of 722 million yuan in government repayments for PPP projects, an increase of 93.57% over the previous year, and 8 new PPP projects have entered or partially entered the operation period. As completed projects gradually increase, subsequent repayments are expected to continue to grow. The company is also actively exploring the revitalization of existing assets, such as issuing accounts receivable asset support plans. In the future, it is expected to benefit from the launch of infrastructure REITs if there are suitable projects. The prefabricated industrial park investment agreement was signed to actively expand production capacity to create a new growth point for the company. It was announced that the subsidiary Long****zhu is investing in the construction of a prefabricated construction technology industrial park project in the Xuancheng Economic and Technological Development Zone. It has now officially received the “Investment Agreement - Prefabricated Construction Technology Industrial Park Project” signed by the Xuancheng Economic Development Zone Management Committee and Long ****zhu. The project is being built in two phases, with a total investment of 1.5 billion yuan. The investment is an important layout to increase the scale of prefabricated production capacity and meet the production capacity needs of future prefabricated orders. It is expected that the first phase will focus on the construction of steel structure factories and supporting PC floor panels. After completion, the annual production capacity of the company's steel structure manufacturing and processing is expected to increase to 200,000 tons, thereby better guaranteeing the rapid expansion of the company's prefabricated business from a production capacity perspective, and is expected to become a new driving force to support the company's growth. Investment advice: It is predicted that the company's net profit for 2020-2022 will be 10.2/11.4/1.26 billion yuan, up 0%/12%/10% year-on-year, corresponding EPS of 0.67/0.75/0.82 yuan (2019-2022 CAGR is 7.3%), and the current stock price corresponding to PE is 12/11/10 times, respectively. Considering the long-term growth potential of the company's prefabricated and infrastructure investment and financing businesses, the “buy” rating is maintained. Risk warning: risk of falling short of expectations in prefabricated business, risk of PPP policy, risk of order conversion progress falling short of expectations, etc.