Key investment events: (1) In 2017, the company achieved operating income of 1,137 billion yuan, an increase of 8.27%, net profit of 190 million yuan, an increase of 4.21%, and earnings per share of 0.22 yuan. (2) Based on the current total share capital of 91,400 shares after deducting the share capital of 91,000 shares after deduction of the proposed repurchase and cancellation of 3,2374 million shares, a cash dividend of 0.43 yuan (tax included) was distributed to all shareholders for every 10 shares, for a total cash dividend of 39.1453 million yuan. Comment: The reward for generating performance on gambling is 50.15 million yuan. Excluding the impact of incentives, net profit of the mother increased by about 29%. Early childhood education revenue increased 20%, and the three subsidiaries fulfilled their promises. In 2017, the revenue of the preschool education business was 479 million yuan, an increase of 21.31%, a gross profit margin of 57.88%, a decrease of 0.08pct. By the end of the year, it had 6 kindergartens chain, 50 managed kindergartens, 4 cooperative kindergartens, 4,922 affiliated kindergartens, 83 special courses, 280 Antescu member schools, 2 trusteeship primary schools, 3 branded primary schools, 1 directly-managed early education institution, and 122 institutions serving early education. The number of member parks increased by 37% monthly. Hongying, Golden Cradle, and Kerr have all fulfilled their performance promises. Hongying's strategic adjustments led to a decline in performance. Hongying Education achieved revenue of 262 million yuan, a decrease of 8.49%. Among them, revenue from the service business decreased by 36.08% to 62.4001 million yuan, and revenue from product sales increased by 5.83% to 199 million yuan. Net profit was 757.07 million yuan, a decrease of 26.05%, exceeding the performance commitment of 53 million yuan. The golden cradle is growing rapidly. Golden Cradle achieved revenue of 198 million yuan, an increase of 81.69%. Among them, revenue from service business increased by 80.72% to 169 million yuan, and revenue from product sales increased by 87.46% to 29.4156 million yuan. Net profit was 107 million yuan, an increase of 76.78%, exceeding the performance commitment of 66.3 million yuan. Keri Education's net profit for the whole year exceeded 40 million. Keri Education was combined for about 2 months, achieving consolidated revenue of 138.11,600 yuan and net profit of 108.934 million yuan. Considering the equity ratio, it contributed 7.63 million yuan in net profit. Net profit of 42,3361 million yuan was achieved throughout the year, exceeding the performance promise of 38.46 million yuan. Dingqi Preschool Education contributed about 2.31 million in net profit. Dingqi's preschool education agreement was consolidated for 2 months, achieving consolidated revenue of 5.2492 million yuan and net profit of 3.3006 million yuan. Considering the equity ratio, it contributed about 2.31 million yuan in net profit. It has not yet entered the performance commitment period (it is promised that the total profit after deduction for 2018/19/20 will not be less than 1,400/14800/2016 million yuan). Investment suggestions: The three education subsidiaries, Hongying, Golden Cradle, and Kerr Education, have all fulfilled their performance commitments. Hongying's strategic transformation led to a decline in performance, and the Golden Cradle grew rapidly. The acquisition of Kerr Education and Dingqi Preschool Education was successfully completed. By the end of 2017, the number of franchised+directly+trusteeship kindergartens had reached 4,982, leading preschool education in terms of the size of the schools. The estimated earnings per share for 2018/19/20 are 0.33/0.37/0.43 yuan, corresponding to a valuation of 30x/26x/23x. The current market value is 8.8 billion yuan, maintaining the “increase in holdings” rating. Risk warning: The expansion of franchise parks falls short of expectations, and the increase in the unit price of visitors to individual parks falls short of expectations.