Kangli Elevator released a semi-annual performance forecast: Net profit attributable to shareholders of listed companies is expected to be about 155 million yuan to 175 million yuan in the first half of 2020, an increase of 50%-70% over the previous year, slightly exceeding expectations. Kangli is the flexible variety we have always recommended. The profit repair brought about by the “scale effect+pattern improvement” will continue, and the company's excellent cost control capabilities have also been highlighted during the pandemic. 2020 is a good harvest year for Kangli. It is estimated that in 20-21, Kangli's net profit will be 410 million/510 million, and the corresponding PE will be 18 times/14 times, so I continue to highly recommend it! The gross margin of the product has been steadily increasing, and its alpha attributes have been highlighted. According to estimates of the overall growth rate of the industry (the cumulative sales volume of the elevator industry in January-May declined slightly year-on-year), Kangli's revenue growth rate in the first half of the year is not expected to be high. The main reasons why the net profit growth rate far exceeded the revenue growth rate include: (1) the company announced that it received about 30 million government subsidies in the first half of the year and 15 million in the same period last year; (2) it is expected that the gross margin of products will increase. The company has locked in most raw material prices in due course in response to falling prices of raw materials such as steel, and optimized the supply chain to reduce costs; (3) scale effect+fine management, which significantly controls sales and management expenses. Execution of orders continues to grow. According to the company's announcement, as of the end of '19, the number of valid orders currently being executed by the company was 5.943 billion yuan (not including winning bids but no deposit received, totaling 367 million yuan), an increase of about 5% in the number of orders in hand compared to the end of the same period last year. The company grasped the peak of national key construction and actively participated in market bidding. In 2019, it won a total of 508 million yuan in bids for a number of electricity and escalator projects in the public transportation sector in terms of high-speed rail and urban rail. Kangli is an elastic variety that we have always recommended. 20 years have been a good year for the company, and I continue to highly recommend it! The profit repair brought about by the “scale effect+pattern improvement” will continue. Benefiting from the company's excellent cost management capabilities (raw materials+cost side) and significant scale effects, gross margin is expected to increase significantly in the first half of the year. Looking ahead to the second half of the year, controllable production costs+accelerated infrastructure investment, accelerated industry clearance, and real estate stabilization are expected to continue. Furthermore, the renovation of old neighborhoods is an important direction for expanding domestic demand. The elevator industry is one of the main beneficiary industries. Opening up the growth ceiling is expected to start a new round of industry boom cycle. Kangli is also one of the beneficiaries. 2020 was a good harvest year for Stanoplex, and I still highly recommend it! Risk warning: Risk of fluctuations in rare earth prices, real estate growth falling short of expectations.