Incident: The company released its 2017 annual report, achieving operating income of 3.889 billion yuan, a year-on-year increase of 31.81%, and realized net profit of 609 million yuan, an increase of 36.46% over the previous year. The basic earnings per share was 0.76 yuan, an increase of 0.21 yuan over the previous year. Comment: Performance is in line with market expectations, and new orders are still strong. The high increase in performance is mainly due to the smooth progress of projects in the garden sector. At the same time, the auto parts sector benefited from increased production and sales in the heavy truck and construction machinery markets, and the business achieved two-wheel drive. The gross profit margin for 17 years was 34.17%, an increase of 0.75pct. The cost ratio for the period was 14.66%, and a slight increase of 0.40pct was mainly due to increased sales expenses and financial expenses due to business expansion. The company's garden business accumulated an unfinished order amount of about 5.6 billion dollars at the end of '17, which is 2.13 times the revenue of the garden business in '17, and the reserves are quite sufficient. Up to now, the company has signed 27 framework cooperation agreements, and the subsequent promotion of framework agreements has helped the company to steadily implement actual orders. The garden business became the number one main business. Employee shareholding showed confidence, and performance in the first quarter of '18 is expected to increase. The garden sector accounted for more than 60% of the company's revenue in 15-17, and has become the company's number one main business. The name was changed to “Meichen Ecology” in November '17, strengthening the company's future development focus. The first phase of the company's employee stock ownership plan has been purchased, totaling 22.829 million shares, with an average transaction price of about 15.60 yuan/share, accounting for 2.83% of the total share capital. The company announced on February 27 that the actual controller, Mr. Zhang Lei, plans to increase his holdings by 1-3 billion dollars within 6 months, while encouraging employees to increase their holdings and commit to cover the bottom, demonstrating the management's confidence in the company's future development. The company predicts a 55.41% to 85.19% increase in first-quarter results, continuing the high growth trend. Financial forecasting and valuation: The company's current PE (TTM) is 19.8X, the current PE (TTM, overall law) for the garden industry is 28.6X, and the current PE (TTM, overall method) median value for the auto parts industry is 22.6X, which is significantly lower than the industry average. We forecast the company's 18-20 revenue of 51.05, 67.08, and 8.821 billion yuan, net profit to mother of 8.67 billion yuan, 11.51 billion yuan, and 1,514 million yuan for EPS, 1.07, 1.43, and 1.88 yuan, respectively. Corresponding PE is 13.50X, 10.17X, and 7.73X, respectively, maintaining a “buy” rating. Risk warning: PPP projects fall short of expectations, and the auto parts market falls short of expectations.