Event: The company released its 2020 three-quarter report. From January to September 2020, the company's operating income was 1,329 billion yuan, up 14.87% year on year, achieving total profit of 260 million yuan, up 19.66% year on year; realized net profit of 221 million yuan, up 18.73% over the same period in 2019; net profit after deducting non-return net profit of 225 million yuan, up 22.05% year on year; and basic earnings per share of 0.37 yuan/share, up 15.63% year on year. Expand production capacity and actively prepare goods. The company's 20Q1/Q2/Q3 revenue growth rate year-on-year was 0.64%/8.49%/34.79%, respectively, and the revenue scale was further expanded. In order to meet the demand for capacity expansion, the company's prepaid long-term asset purchases increased. As of 2020Q3, the company's other non-current assets increased by 57.11% compared to the beginning of the year. Although the company's accounts receivable increased by 57.26% compared to the beginning of 2020 due to the expansion of sales scale, the accounts receivable turnover ratio increased 2.17 times compared to 2.11 times in the same period in '19. At the same time, the company increased the stocking of raw materials and outsourced processing and procurement to meet the needs of production tasks. Accounts payable increased 35.04% from the beginning of the year, and prepayments increased 100.48% from the beginning of the year. The cost rate increased during the period, and R&D expenses continued to rise sharply. The company's fee rate for the period from January to September 2020 was 20.75%, an increase of 1.31 pct over the same period in '19, and the management fee rate was 14.15%, an increase of 2.04 pct over the same period in '19. In order to maintain its competitive position and leading edge in the industry, the company is committed to industrial transformation and upgrading. Driven by key R&D projects, the company continues to push forward R&D system reform, and continues to increase R&D investment. From January to September 2020, R&D expenditure increased by 70.82% year on year. Plan industrial product transformation and strengthen intelligent equipment business. Based on the company's long-term development plan to guarantee the future industrial and product transformation of its subsidiary Xi'an, the company unified Shijiazhuang Huayan to bid for 126242.67 square meters of land in June to enhance its overall competitiveness in the field of intelligent transportation. Affected by the epidemic, Shijiazhuang Huayan customer service personnel were blocked from going out for installation and commissioning, which had a great impact on the company's intelligent transportation business. The backlog of products is expected to be released in the second half of the year. At the end of October, the company approved China Aviation Electric Survey Xi'an to bid for 119.16 acres of land use rights with its own funds, for a total amount of about 39.3228 million yuan. China Aviation Telecom surveyed that in the first half of 2020, Xi'an's revenue increased by 45.93% year on year, and net profit increased 185.39% year on year. If the auction is successful, it will help strengthen the technological innovation capabilities and production capacity of the company's intelligent equipment business such as aviation and military products, smart logistics, and unmanned retail, and further enhance the company's overall competitiveness. Profit forecasts and investment advice. The company's EPS for 2020-2022 is expected to be 0.45, 0.56, and 0.67 yuan respectively. Combined with the 2021 average PE of comparable companies, the company is given a valuation range of 30-35 times in 2021, corresponding to the reasonable value range of 16.80-19.60 yuan/share, giving it a “superior to the market” rating. Risk warning. (1) Market uncertainty; (2) increased competition.