Net loss of RMB300.1 mn was recorded in 1Q2020, in line withexpectation. Revenues, gross profit and operating profit of the Company in1Q2020 decreased YoY by 22.7%/ 30.1%/ 56.3% to RMB35,851 mn/RMB4,192 mn/ RMB1,172 mn, respectively. Hit by the outbreak of COVID-19in China, a net loss in the amount of RMB300.1 mn was recorded during theperiod, which is consistent with the profit warning that the Company issued inmid-April 2020. Newly signed contracts in the first quarter of 2020 reachedRMB127.706 bn, up YoY by 0.7%.
　　We expect domestic infrastructure investment growth in 2020 to fallbetween 4% and 6%. According to the National Bureau of Statistics of China,China FAI in the first 4 months of 2020 dropped YoY by 10.3% toRMB13,682.4 bn, narrowing from 16.1% YoY decline recorded in 1Q2020.
　　Domestic infrastructure investment growth in the first 4 months of 2020reached -11.8%, which was up by 7.9 ppt from the growth rate of -19.7% seenin 1Q2020. Further, nationwide power sector investment in the first 4 monthsof 2020 surged YoY by 10.7% to RMB155.9 bn, with power engineeringinvestment jumping 45.7% YoY to RMB88.9 bn. We expect domestic powersector investment in 2020 to hit RMB900 bn, implying 12.6% YoY growth.
　　We maintain "Accumulate" investment rating and TP of HK$1.00. As the1Q2020 operating results of the Company met expectation, we maintain ourearnings forecasts unchanged. Our EPS estimates from FY20 to FY22 areRMB0.152/ RMB0.185/ RMB0.206, respectively. Our TP translates to 6.0x/4.9x/ 4.4x FY20-FY22 PER or 0.5x/ 0.5x/ 0.4x FY20-FY22 PBR.