Vaillant has announced satisfactory 2019 results. Net profit increased 32.9% year-on-year to HK$284 million, confirming our judgment that the company will return to a growth path in the second half of 2019. The management is very optimistic about the business and profit outlook for 2020, based on 1) plans that the 148.1 MW wholly owned IBO project will be put into operation within the year, while the 169.3 MW project will contribute throughout the year; 2) the Myanmar project jointly operated with China Technology Import and Export Corporation will be put into operation in the first half of the year. We expect the company's net profit to continue to grow by leaps and bounds in 2020/21, and we expect the company to achieve an average annual profit growth rate of 66% in 2019-22. Reiterate the buy rating. Earnings for FY2019 were up 32.9% year over year. Revenue increased 15.4% year over year to HK$2,794 million, of which 63% came from system integration (SI) business sales and the rest from IBO business. The revenue structure was different from our expectations, mainly due to 1) Vigneng's SI business revenue increased significantly in the second half of '19, and 2) delays in the operation of some IBO businesses. The company's overall gross margin fell 2.8 percentage points to 26.4% year over year due to changes in revenue structure and the consolidation of fuel costs in some IBO businesses. The company confirmed consulting revenue of HK$135 million during the year, which partially offset the impact of the decline in gross margin. At the same time, management expenses also increased 24.4% year over year due to consulting services. Overall, the company achieved a net profit of HK$284 million, 14.0% higher than our expectations. Look forward to 2020 being very fruitful. We expect the company to add 148.1 megawatts of IBO production capacity during the year, while the 169.3 megawatts that were put into production last year will also contribute throughout the year. The more important part comes from a large-scale joint project between the company and China Technology Import and Export Corporation in Myanmar (with a total installed capacity of 1059.5 MW), which will be put into operation within the first half of 2020. We believe that the company will have high profit visibility in 2020, and that profit sharing among affiliated companies will bring significant profit growth to the company. Strengthen partnership with MTU. The company signed a distribution agreement with MTU, its main supplier of power generation engines, for the sale of MTU products in China. According to management, Vaillant has now become one of MTU's biggest customers. The distribution agreement will further strengthen the strategic partnership between the company and MTU and help the company obtain a long-term supply of high-quality engines. VPower's outlook for modular generator sets in the Chinese region is optimistic, and it is expected that the data center and shipping markets will support the company's SI business to continue to grow in the medium term. The profit forecast for 2020/21 was raised by 63.2/ 78.5%. Based on management updates on the project situation and the higher profit visibility that the Myanmar project will bring, we have significantly raised the company's profit forecast for 2020/21. We increased our earnings per share in 20/21 by 63.2%/78.5% respectively to 26.4/45.8 HK cents. Our forecast is 88.3%/134.8% higher than the unanimous market forecast. Our view on Vaillant Group is to buy with confidence and reaffirm the buying rating. The target price is unchanged at HK$3.25 per share. Our target price corresponds to 12.3/7.1 times the predicted price-earnings ratio for 2020/21.