The 2017 results were in line with expectations. Huijishan announced 2017 results: operating income of 1.29 billion yuan, up 22.9% year on year; net profit attributable to parent company was 180 million yuan, up 28.6% year on year, corresponding to earnings of 0.37 yuan per share. Gross margin increased by 0.41ppt to 43.6%, and major source companies raised prices for core products by 6 to 11% in 2017. The 4Q17 revenue growth rate was 17.9% year on year, and there has been a steady increase since the second quarter. Overall demand for rice wine continued to improve when the fourth quarter was combined with Wu Felt Hat and Tang and Song. Development trends First, the rice wine industry ushered in a new round of opportunities for nationwide consumption upgrading, with leading enterprises benefiting from core benefits. The public is pursuing quality and health, and the value of rice wine has been re-understood. Demand for rice wine is rising in many places. The trend of substitution for low-grade liquor and beer is clear, and is beginning to show a trend of nationalization and rejuvenation. During Spring Sugar, we participated in the first rice wine revival forum. Channel providers from all over the world are actively seeking agency rights for famous rice wine brands such as Huijishan and Guyue Longshan. Among them, there is no shortage of distributors in major traditional liquor consuming provinces such as Henan, Shaanxi, and Hebei. Second, key markets outside the province are expected to continue to grow rapidly in 2018. The Huijishan brand achieved high growth of more than 40% in Jiangsu/Anhui in 2017, reaching a scale of about 122/0.3 billion yuan. The growth rate of the northern market was generally above 50%. Huijishan and Wu Felt Hat grew by more than 20% in Shanghai to 170 million yuan. The company has gradually formed brand and scale advantages in some regions. In 2018, it will continue to improve the level of refined marketing in key markets, focus on brand and category promotion and cultivation, expand investment, and promote continued rapid revenue growth. It is expected that the Jiangsu/Anhui market growth rate will still reach around 30%, while Shanghai will remain at around 20%. Finally, the company's coverage in the national market is still low, and more aggressive marketing strategies and cost investment are needed. In 2017, revenue from regions other than Jiangsu, Zhejiang, and Shanghai was only 85 million yuan, accounting for 7%, and the number of dealers was only 37. A nationwide sales network still needs to be built, and a large number of empty markets are in urgent need of development and layout. Profit forecasts We have raised our earnings per share forecasts for 2018 and 2019 by 2% from RMB 0.41 and RMB 0.5 to RMB 0.42 and RMB 0.51, respectively. Valuation and recommendations Currently, the company's stock price corresponds to 3.6x/3.2x P/S in '18/19. We maintain our recommended rating and target price of RMB 16.70, which is 55.78% higher than the current stock price. The target price corresponds to 2018/19 5.7/4.9x P/S. The risk is that if the company's investment in nationwide marketing is small, revenue may fall short of expectations.