1Q2020 operating results of the Company met our expectation. Salesin the first quarter of 2020 went up YoY by 4.3% to RMB8,190 mn and netincome jumped YoY by 11.9% to RMB396 mn. Net profit during thereporting period was approximately 26.1% of our full-year earnings estimatefor 2020. Consolidated gross margin dropped YoY by 4.7 ppt to 20.1% in1Q2020, but operating expenses reduction during the period effectivelyboosted the profitability of the Company. New orders signed in 1Q2020reached RMB11,880 mn, up 24.2% YoY. Renewable energy equipmentcontributed 30.9% of the new orders in 1Q2020.
Nationwide power sector investment in the first 4 months of 2020increased YoY by 10.7% to RMB155.9 bn. In which, power engineeringinvestment in 4M2020 reached RMB88.9 bn, up YoY by 45.7%. Thermal,hydro, nuclear and wind power engineering investment YoY growth duringthe period reached -12.7%, -15.2%, -17.5% and +222.6%, respectively. Weexpect domestic power sector investment in 2020 to be no less thanRMB900 bn, implying YoY growth of 12.6%.
We maintain the investment rating of "Buy" and reiterate our TP ofHK$5.50. As the 1st quarter operating results were in line with ourexpectations, we have maintained our earnings estimates unchanged withEPS estimates from 2020 to 2022 of RMB0.492, RMB0.598 andRMB0.730, respectively. Our TP corresponds to 10.2x/ 8.4x/ 6.9x FY20 toFY22 PER, or 0.5x/ 0.5x/ 0.5x FY20 to FY22 PBR.