Incident The Company announced its semi-annual performance forecast for 2020. In the first half of the year, it achieved net profit of 155 million yuan to 175 million yuan, an increase of 50% 6-70% over the previous year. The post-pandemic elevator production continued to be booming. Elevator production resumed rapid growth after the pandemic. According to data from the National Bureau of Statistics, in January-May 2020, elevator production was 374,000 units, with a cumulative growth rate of -3.6%, of which 149,000 elevators were produced in January-March, with a year-on-year growth rate of -20.7%, mainly due to the shutdown of construction sites due to the epidemic, and elevator shipments were limited: However, rapid growth began in April. The monthly elevator production in April and May was 110,000 and 116,000 units, respectively. Judging that the elevator industry will continue to grow rapidly after the pandemic The economy has reversed since 2019. This round of elevator boom reversal is mainly due to the fact that since 2016, the growth rate of new housing construction area has continued to be higher than the growth rate of housing construction area, tightening the financing environment and rising raw material costs. Real estate companies generally adopt a high turnover strategy of “quick start, quick sales, slow construction, and late delivery”, but as the share of off-plan housing sales reached a record high, real estate companies generally faced delivery pressure, so the growth rate of housing construction area increased from the end of 2018, thus driving demand for elevators. As of May 2020, the cumulative growth rate of the newly started area of housing, the cumulative growth rate of the construction area, and the cumulative growth rate of the completed area were -12.8%, 2.3%, and -11.3%, respectively. The construction/completion side boom was higher than that of newly started construction and will continue, and the elevator industry maintained a high level of prosperity. Shipment volume and profitability have reversed, the company's net profit in a single quarter reached a record high, and the company's brand effect continues to be highlighted, and the company's elevator shipments and current orders continue to grow: in addition, elevator sales prices have continued to maintain a steady trend since 2019, while the cost of raw materials such as steel has improved, and elevator profitability has ushered in an upward trend. The company achieved net profit of 155 million yuan to 175 million yuan in the first half of the year. Of these, net profit from the mother was 5.7626 million yuan in the 1st quarter, that is, net profit of the mother was 1.50-170 million yuan in 2Q. The net profit of the company in a single quarter was a record high in the company's history. By the end of 2019, the company was executing valid orders of 5.943 billion yuan, an increase of 9.25% over the previous year. Including orders that won the bid but did not receive a deposit, the order in hand at the end of 2019 was 6.310 billion yuan, an increase of 8.23% over the previous year, guaranteeing performance growth in 2020. Urban rail will enter the peak traffic period in the next three years. The company's new orders for urban rail elevators are growing rapidly. We judge that the urban rail traffic mileage will continue to reach a new high in 2020-2022. According to statistics from the Forward-looking Industry Research Institute, urban rail transit will reach a peak of traffic in 2020-2022. It is expected that the additional mileage will be 1153/1701/1897 kilometers, with an average compound annual growth rate of 25.1%. The rapid increase in the number of new mileage will drive a significant increase in elevator demand. According to the Ministry of Housing and Construction's “Urban Rail Transit Network Planning Code”, in central urban areas, urban rail transit accounts for the proportion of urban public transportation travel; most cities with a planned population of 5 million or more are greater than 50%; most cities with a planned population of 3 million to 5 million are greater than 40%, and cities with a planned population of 1.5 million to 3 million are generally greater than 30%. Currently, most cities have failed to meet the standards, and the development of rail transit has become a key task in advancing transportation construction. In 2019, the company's total bid amount for rail transit elevators reached 508 million yuan. Judging that the company's winning bid amount in the rail transit elevator market in 2020 will far exceed that in 2019. Investment suggestions: Increase the company's revenue in 2020-2021 to 6.052 billion yuan and 7.062 billion yuan respectively, and net profit of 480 million yuan and 600 million yuan respectively. The corresponding EPS is 0.56 yuan/share and 0.75 yuan/share, respectively. The corresponding EPS is 0.56 yuan/share and 0.75 yuan/share, giving it 20 times the P/E in 2020, and the target price is 12.0 yuan/share, and upgraded to a “buy” rating. Risk warning: 1) industry sentiment falls short of expectations; 2) order execution falls short of expectations.