Based on material development and molding processes, Huapei Power has become a core supplier of key components for global turbochargers. Based on material research and development accumulation, with precision casting and machining as the main processes, the company has formed a business layout focusing on the auto parts industry and gradually expanding into a wider range of application fields such as medical devices. Currently, the main revenue contributors are exhaust valve components and intermediate housings required for turbochargers. At the same time, there have been further breakthroughs in other automotive product lines, such as passenger car exhaust systems, commercial vehicle braking system key components, including valve bodies and valve products, and the industrial hydraulic pump series hydrostatic pump parts required in the field of industrial systems. More rich product forms and continuously expanding new businesses are expected to provide steady performance support for the company's future growth. In 2019, the company achieved revenue of 631 million yuan. While the company's Wuhan factory was greatly affected by the epidemic, the company's performance recovered quarterly. In the first three quarters of 2020, it achieved total revenue of 4.4 billion yuan, a year-on-year decrease of only 2.5%. The turbocharger industry is still on the rise. Huapei Power is expected to continue to benefit from the industry's growth rate. Currently, China's turbocharger penetration rate is 48%. According to Honeywell's forecast, the turbocharger penetration rate is expected to reach 70% in 2025. According to this assumption, we estimate that the installed capacity of Chinese turbochargers may reach 19.4 million units in 2025, and the compound annual growth rate of China's turbocharger demand is expected to reach 9.08% in the next 5 years. Looking at the global scale, the current global turbocharger penetration rate is 63%. According to Honeywell's forecast, the turbocharger penetration rate is expected to reach 80% in 2025. According to this assumption, we estimate that the global installed capacity of turbochargers may reach 74.355 million units in 2025, and the compound annual growth rate of global turbocharger demand is expected to reach 5.26% in the next 5 years. Based on the R&D accumulation and process of homologous metal materials, downstream scenarios should continue to be enriched. Against the backdrop of increasing turbocharger penetration rate, the company makes full use of material R&D accumulation and material molding processes to actively expand the needs of different downstream scenarios. The company's annual report shows that it has entered the supply chain of Faurecia, the largest supplier of exhaust systems in the world, and has become a supplier of its key exhaust system components; supplies the commercial vehicle sector with key components of automobile braking systems, including valve bodies and valve plate products; and supplies industrial hydraulic pump series hydrostatic transmission pump parts to the industrial systems field. More rich product forms and continuously expanding new business are expected to provide steady performance support for the company's future growth. Excellent financial situation, protecting the company According to the company's regular reports, the company's balance ratio is about 20%, which is at a low level in the manufacturing industry, showing the company's cautious expansion attitude; cash on books and equivalents were 600 million, operating cash reached 101 million in the third quarter, an increase of 54% over the previous year; gross margin level rebounded to 34%, and the company's finances were steady. Profit forecast and investment advice: It is estimated that the company's EPS (diluted) in 2020-2022 will be 0.25, 0.49, and 0.76 yuan, respectively, and PE will be 53.5x, 27.2x, and 17.6x, respectively, giving a “buy” rating. Risk warning: the automobile industry's sales volume falls short of expectations; the intensification of the overseas epidemic affects the company's overseas business risks; mass production of new projects falls short of the expected risk.