Investment highlights: Revenue in '17 was stable compared to revenue growth in the fourth quarter alone. In 2017, the company's revenue was 2.77 billion yuan, up 23.06% year on year, net profit was 112 million yuan, up 12.25% year on year, gross profit margin 17.2%, down 2.56 pct year on year, net profit margin 4.4%, and a slight decrease of 0.3 pct. In the fourth quarter, revenue for the fourth quarter was 695 million yuan, up 24.09% year on year, net profit was 24 million yuan, down 29.49% year on year, gross profit margin 10.0%, down 10.0 pct year on year, net profit margin 3.4%, and 1.10 pct year on year. On the revenue side, from a regional perspective, the company's domestic sales in 2017 increased by 38.5% compared to 2016, which was higher than the year-on-year growth rate of foreign sales by 22.47pct. The share of domestic sales increased by 3.93pct compared to 2016. We judge that it is mainly due to the improvement in domestic consumption in 2017 and the increase in demand. The sales volume of the main business is good. In 2017, the company's main business sales of clothing, hardware products, silk products, and fabric products increased by 3.93%, 30.53%, 94.09% and 45.51% year-on-year respectively. Among them, clothing sales increased by 16.01% year on year, an increase of 15 pct over the growth rate of clothing sales in 2016, and the reason for the large gap between this and the year-on-year increase in sales is that the exchange rate of the RMB against the US dollar fluctuated greatly. We believe that the development of the company's main business is still stable and good. Cocoon silk collaborative trade deepens the cocoon silk supply chain. In 2017, the company and the largest Internet trading platform in the domestic cocoon silk industry chain completed collaborative trade business amounting to 353 million yuan. While expanding cooperation in the field of cocoon silk supply chain financing, the Golden Silkworm Network Company and the bank are actively promoting the development of cocoon silk collaborative trade and building a cocoon silk supply chain business system. The company's sales of silk products increased 94.09% year on year in 2017. The cost side is affected by raw material prices and one-time asset impairment. The company's gross margin fell 2.56 pct year on year in 2017, mainly due to fluctuations in product raw material prices. According to WIND data, the lowest price for the 20/22D factory inspection of Baichang silk rose from 369,500 yuan/ton on January 1, 2017 to 497 million yuan/ton on December 31, 2017, which had an impact on cost control. The company reported a total of 95 million yuan in impairment losses of various types of assets in 2017. Among them, the subsidiary Zhejiang Jiaxin Miaomucheng Development Co., Ltd. accrued a total of 82 million yuan in inventory price reduction preparations, investment real estate impairment preparations, fixed asset impairment preparations and intangible asset impairment preparations, and intangible asset impairment preparations, and intangible asset impairment preparations totaling 82 million yuan. Inventory for inventory products in the current period was 12 million yuan, an increase of 9% over 2016. We judge that there is no significant impairment pressure on the company's main business. Profit forecasting and valuation. Affected positively by the improved domestic consumption situation, the company's domestic sales increased markedly in 2017, face volume and material transactions increased, and the development of the golden silkworm network accelerated. We believe that although exchange rate fluctuations will slow revenue growth to a certain extent, the company's net profit will maintain a 25.59% increase in 2018 on the basis that asset impairment has been fully calculated once in '17, the company's net profit will maintain a 25.59% increase in 2018. We expect the company to achieve net profit attributable to the parent company of 140 million yuan and 162 million yuan in 2018-2019. EPS reached 0.24 and 0.28 yuan. We gave the company 30XPE in 2018, corresponding to the target price of 7.2 yuan/share, maintaining the “increase in holdings” rating. Risk warning. Prices of raw materials have fluctuated greatly, and the export environment is sluggish.