Testing is a promising industry with long-term double-digit growth, and is booming; the testing industry is transitioning from horse racing to a stage of fine management. The company is deeply involved in the electrical appliance testing segment, benefiting from changes in the competitive landscape of the industry; the company's asset consolidation peak cycle is coming soon, and asset turnover efficiency is expected to pick up, which is expected to accelerate the company's profit growth. For the first time, coverage was given a “buy” rating, with a target price of 10.00 yuan. It has a rich historical heritage and is the leading domestic electrical appliance monitoring leader. The company's predecessor was the Electric Technology Research Institute of Suzhou High-tech Industrial Development Zone. Currently, it is the third party agency with the largest inspection scale in the field of energy equipment in China. It can provide one-stop testing services for various types of high and low voltage electrical equipment. The high-voltage testing business is the core of the company's revenue and profit, accounting for 78% of revenue in 2018. The controlling shareholders and actual controllers of the company are Hu Delin and Hu Chun's father and son, holding a total of 34.84% of the shares. The “small, scattered, and weak” situation in the testing industry for a long time is facing an improvement. The revenue of domestic testing institutions reached 281.1 billion yuan in 2018, and the CAGR reached 15% from 2013 to 2018. The development from “made in China” to the “quality in China” stage will drive the industry's long-term prosperity. The testing market is expected to grow to about 600 billion yuan in 2025. The domestic testing industry has come to an end. The “weak and weak” competitive pattern is about to usher in changes. Mergers and acquisitions are about to drive an increase in industry concentration. Institutions with scale advantages or deep segmentation have great potential for future development. Electrical inspection has high barriers, and UHV & distribution grids protect demand. China has implemented a mandatory product certification system for low-voltage electrical appliances. Although high-voltage electrical appliances have not been implemented, the special nature of high-voltage electrical appliances makes them have the characteristics of compulsory product testing. In addition, electrical appliance testing technology and financial barriers are prominent, effectively reducing the willingness to enter the market, and the concentration of the industry is relatively high. On the demand side, UHV, distribution networks, power Internet of Things construction, etc. guarantee the long-term steady demand for electrical appliance testing. Outstanding technical and regional advantages, and multiple drivers to help performance meet inflection points. The company has obvious qualification advantages and outstanding bargaining power in the field of electrical appliance testing. In 2017, the company ranked first in both high and low voltage electrical appliance testing market share, with a clear lead. It is expected that the company's strengthening of asset construction to establish qualification barriers will soon come to an end. Internal management reforms, increased external expansion, etc. may be on the agenda. In addition, the natural climbing phase of project production capacity ends, and the depreciation scale will peak in 2020. It is expected that the company's project capacity utilization efficiency will improve, and profit growth is expected to accelerate. Risk factors: slow expansion of high-voltage testing business; impact on brand credibility; sharp macroeconomic decline, etc. Investment suggestions: We expect the company's net profit from 2019 to 2021 to be 1.62/2.17/285 million yuan respectively, converted EPS to be 0.21/0.29/0.38 yuan, respectively. The current stock price corresponding to PE is 32/24/18 times, respectively. Referring to the valuations of similar companies in the industry and the company's historical valuation situation, the company was given a target PE of 35 times in 2020, with a target price of 10.00 yuan. Coverage for the first time, and a “buy” rating was given.