The company belongs to Hanggang Steel Group and began to develop the digital economy industry. Hangzhou Iron and Steel Co., Ltd. was founded in February 1998 and listed on the Shanghai Stock Exchange in March of that year. Currently, the largest shareholder of the company is Hanggang Steel Group, and the actual controller is the Zhejiang State-owned Assets Administration Commission. After the complete shutdown of the Banshan Iron and Steel base in 2015, Hanggang Steel's cloud computing data center project was the first major implementation project for the Group to implement the big data strategy and introduce new industries. The project plans to invest about 2.5 billion yuan and plan to build about 11,000 cabinets. Under the guidance of the Group's new strategy, the company has also begun to develop the digital economy industry. In July 2019, the company acquired 100% of the shares of Hanggang Cloud Computing Data Center Co., Ltd. and increased its capital, and also invested 1 billion yuan to participate in Zhejiang Fuzhe Integrated Circuit Industry Development Co., Ltd. The restructuring formed three business segments: steel manufacturing+commodity trade+environmental protection After the closure of the Banshan Iron and Steel Base in 2015, the company planned major asset restructuring to achieve long-term stable development and invested in assets such as Ningbo Steel, Ziguang Environmental Protection, and Renewable Energy. It has now formed three business segments: steel manufacturing, commodity trade, and environmental protection. After the restructuring was completed, the company's specific business was carried out by subsidiaries. Among them, the steel manufacturing business was carried by the subsidiary Ningbo Iron and Steel. The products were mainly hot-rolled coils, with an annual production capacity of about 4 million tons, including carbon structural steel, low alloy structural steel, automotive structural steel, high-quality medium and high carbon steel, cold formed steel, electrical steel, etc., and more than 100 steel grades, which are widely used in engineering construction, home appliances, automobile structural parts, containers, machinery manufacturing and other fields. Steel prices declined in 2019, raw material prices rose, and the company's performance was under pressure. As of the third quarter of 2019, the company achieved revenue of 19.497 billion yuan, a decrease of 1.26% over the previous year; net profit was 821 million yuan, a decrease of 48.83% over the previous year. In 2019, the release of supply led to an increase in the degree of excess industry, a sharp increase in steel production, and a decline in steel prices. Superposition Company's No. 1 blast furnace maintenance affected production, and the falling volume and price of hot-rolled coils put pressure on the company's revenue. Meanwhile, due to the dam collapse in Vale in Brazil, the sharp rise in iron ore prices has increased the pressure on the company's cost side. Although the company's rate for the period has always been lower than the industry average, the company's net sales interest rate deteriorated due to the decline in gross margin, and the level of profit declined. The excellent geographical location brings cost advantages. The development of new fields enhances the company's ability to withstand cycles in terms of geographical location, Ningbo Steel, which carries the company's steel business, is close to Beilun Port. The good geographical location has brought logistics cost advantages and rich market demand to the company. On the business side, the company is strengthening research and development to promote the upgrading of traditional steel manufacturing business, improving its own steel business chain through the acquisition of commercial business owned by the controlling shareholder, and enhancing the company's competitiveness and voice upstream and downstream of the industrial chain. At the same time, the company is strengthening development in new fields and attaching importance to the development of environmental protection and data economy industries. This will enhance the diversity of the company's industries. While expanding revenue sources to achieve transformation, it can enhance the company's ability as a steel company to cope with cyclical risks. First coverage, giving a “buy” rating. We expect the company's revenue in 19-21 to be 267.14/275.16/29.717 billion yuan, respectively, and net profit of 9.57/9.85/1,069 million yuan respectively, giving a target price of 6.56 yuan. First coverage, giving a “buy” rating. Risk warning: The mismatch between supply and demand in the steel industry has led to a decline in the company's steel business profits, IDC's progress has fallen short of expectations, and unpredictable risks in the company's own operations.