Investment Essentials: Maintaining an “Overweight” rating. 2020Q3's revenue of 629 million yuan increased 16.15%, and net profit to mother of about 79 million yuan increased 85%, exceeding expectations. Considering the rapid recovery of the H2 industry, the company's EPS forecast for 2020-2022 was raised to 0.15 (+0.02), 0.17 (+0), 0.22 (+0), maintaining the target price of 4.21 yuan, corresponding to the 2020-2022 PE of 28.07/24.76/19.14 times, maintaining the “gain” rating. Sales exceeded production in a single quarter, and demand reached an inflection point. The revenue growth rates of Q1-Q3 in a single quarter were -57.61%, -16.45%, and +16.15%, respectively, confirming the pace of restoration in the downstream home furnishing industry and entering an inflection point of recovery. We estimate that Q3 companies have achieved greater sales than production, and the trend of demand recovery will continue in Q4 and even next year, and ushered in a relatively obvious low base period in 2021 H1. Structural upgrades and raw material price reductions raise gross profit margins, and work stoppage losses reduce cost rates. The Q3 company's gross profit margin was 24.27%, up 2.2 pct year on year. The judgment was due, on the one hand, to the increase in the share of formaldehyde-free boards driven by consumption upgrades; it also benefited from the price reduction of chemical raw materials. In Q3, the sales expense ratio was 8.22%, down 1.27pct year on year. Benefiting from the dilution effect, the management expense ratio decreased by 3.51% month-on-month, and the main benefit of shutdown losses disappeared. Judging that Q4 gross margin and expense ratio will maintain this normal center. The Qinzhou project opened up room for growth, and equity incentives for repurchases showed strong confidence. The company decided to invest in a 500,000 cubic wood-based panel production capacity project in Qinzhou. Qinzhou has an excellent geographical location and a timber trade terminal, which will open up space for the company's further growth. It is estimated that the New Zealand project may start with timber trade first. Recently, the company announced that it plans to use 75 million yuan to repurchase 17.86 million shares for equity incentives, showing strong management confidence. Risk warning: Raw material prices fluctuate, and new projects fall short of expectations.