Incidentally, on January 25, the company issued the “2017 Annual Results Advance Notice”. The company's 2017 annual results are expected to increase by 1,061 billion yuan to 1,195 billion yuan year on year, up 792% year on year. Benefiting from the recovery of the industry, the volume and price of the company's products rose sharply in 2017, and the country continued to push for supply-side reforms to reduce excess production capacity in the steel industry. Based on 2016, a total of 50 million tons of capacity reduction tasks were completed nationwide in 2017, with a cumulative production capacity of 115 million tons over two years. Furthermore, in the first half of 2017, the country launched an operation to crack down on “ground steel”. As of June 30, 2017, a total of 140 million tons of “ground steel” production capacity was banned, equivalent to an output of about 70 million tons. In addition, starting November 15, environmental production restrictions were imposed in and around Beijing-Tianjin-Hebei, causing further compression on the steel supply side. The good improvement in the supply and demand relationship in the steel industry has led to a return to rationality in steel prices. The China Steel Association's long material price index rose from 96.68 points at the beginning of 2017 to 128.98 points at the end of the year, an increase of 33.4%. While prices are rising, the company acquired the advantage of a 2,300m3 blast furnace and two 120-ton converters at the end of 2016, and crude steel production is expected to increase by 1.65 million tons in 2017. The company seized the opportunity for the industry to recover, achieved a sharp rise in volume and price, and a sharp rise in performance. The month-on-month decline in profit in the fourth quarter is due to the impact of blast furnace overhauls on production. According to the company's announcement, the reason for the month-on-month decline in the company's fourth quarter performance in the fourth quarter is probably due to the fact that since the fourth quarter, the company's No. 4 blast furnace, has undergone a two-month maintenance period. This maintenance is due to normal annual maintenance, which affected production in the fourth quarter; in addition to maintenance factors, downstream demand in the northern region was affected by the cooling temperature and entering the off-season. The price of rebar in the Northeast region was relatively low, causing the company's fourth quarter performance to decline relatively month-on-month. However, the company's overhaul has been completed, and production capacity will be fully released in 2018, and the increase in production may bring more room for growth in the company's performance. The resumption of work in the north boosted demand. The company may benefit from the impact of environmental production restrictions, and the country's steel production has been suppressed. Currently, the country's social inventory continues to operate at a historically low level. However, after entering spring, as the temperature in the north warms up, downstream construction companies will begin to concentrate on resuming work, and demand for construction steel will grow rapidly, which is expected to rapidly drive prices in the northern region. As a leading long-wood enterprise in Northeast China, the company may benefit from rising spot prices driven by the resumption of work in the North. A leading regional long materials company with stable profits, maintaining the fourth quarter equipment maintenance and traditional off-season impact performance of purchasing rating companies. Production capacity will be fully released in 2018, which may be a catalyst for performance growth. The company expects EPS to be 0.47 yuan, 0.96 yuan, and 1.06 yuan in 2017-2019, corresponding PE is 10.91 times, 5.39 times, and 4.91 times, maintaining the purchase rating. Risk warning: Macroeconomic and supply-side reforms fall short of expectations, the recovery in demand to resume work in the North falls short of expectations, corporate governance and other risks.