Performance continued to grow well, with outstanding cash flow performance. In 2019, Andong Oilfield Services achieved operating income of RMB 3.59 billion, up 22.3% year on year; realized net profit of RMB 270 million, up 20.8% year on year; and earnings per share of RMB 0.09. Adhering to the core business goals of cash flow and return on net assets, the company achieved free cash flow of RMB 240 million in 2019, a significant increase of 450.7% over the previous year. Revenue from drilling/completion/oil production services increased by 21.2%/12.7%/32.2% year on year, respectively. The gross profit margin was 35.7%, down 2.3 percentage points from the previous year. Mainly due to changes in revenue structure, the profit margin of the high-growth domestic business was relatively low. It successfully issued 300 million US dollars of bonds and bought back some of the old bonds to reduce future interest expenses. The company successfully issued 300 million US dollars of bonds in December 2019. The coupon interest rate was 7.5%, and the interest rate of 9.75% compared to old bonds dropped significantly. The company's cash on hand reached RMB 2.42 billion at the end of 2019, which is conducive to resisting risks and achieving sustainable management in an environment of falling oil prices. Following the issuance of the new bonds, the company announced in early 2020 the repurchase of approximately US$100 million of old bonds to reduce interest expenses. The company's orders are expected to be affected only by falling oil prices. The company was able to cross the cycle. The company's new orders in 2019 and the orders in hand at the end of the year both reached record highs; however, the collapse in oil prices at the beginning of the year brought great uncertainty to the industry. We believe that in the context of increasing the self-sufficiency rate of oil and gas, domestic investment is resilient. In particular, investment in the natural gas sector, which the company focuses on, can be maintained, which has little impact on the volume of on-going orders; there is a possibility that some drilling and completion service orders in overseas markets may be delayed or cancelled, but the oilfield management services that the company has focused on promoting in recent years have not been affected. We believe that the company has continuously optimized its business model over the past two years, with cash flow as the core, and improved the cost structure. It already has the ability to cross the cycle, and is less affected by the current round of oil price declines than during the last round of low oil prices. The decline in oil prices suppresses valuations, lowers target prices, and maintains “buy” ratings. Although we believe that as the epidemic is gradually brought under control in the future, production reduction alliances are expected to be re-established, and long-term oil prices will recover; however, at this stage, oil prices are running at a low level, which may affect the industry's recent prosperity and valuation level. We lowered the company's profit forecast for 20-21. The EPS for 20-21 is expected to be 0.07/0.10 yuan (the original forecast was 0.12/0.14 yuan), respectively; the 22-year EPS forecast is 0.12 yuan, respectively; the 22-year EPS forecast is 0.12 yuan. The company has traded an average of 8.8 times PE (TTM) in the past three years, giving 9 times PE in 2020, lowering the target price to HK$0.75 and maintaining the “buy” rating. Risk warning: oil price fluctuation risk, order reduction risk, geological situation risk, exchange rate risk