Investment highlights: The company released its 2017 annual report. In 2017, the company achieved operating income of 1,009 billion yuan, an increase of 49.26% over the previous year; realized net profit attributable to shareholders of the parent company of 172 million yuan, an increase of 38.36%; the company's operating income and net profit in 2017 both reached record highs. The company plans to distribute a cash dividend of 1.80 yuan (tax included) for every 10 shares to all shareholders. Downstream recovery boosted the company's performance to a record high. The company's refrigeration equipment products and tank container business both achieved significant growth in 2017. The company's refrigeration equipment products achieved revenue of 314 million yuan, a year-on-year increase of 46.33%, and gross margin of 39.11%, an increase of 1.58 percentage points over the previous year. The company achieved sales breakthroughs in maintaining relationships and business development with major customers such as Yasui Co., Ltd. and Zhengda Group; added customers in the cold storage industry and received iconic orders. The company's tank container products achieved revenue of 666 million yuan, an increase of 56.17% over the previous year, and gross margin reached 29.06%, an increase of 2.09 percentage points over the previous year. Thanks to factors such as the recovery of the international shipping industry, the promotion of the country's “Belt and Road”, and the strengthening of environmental protection, standard tanks and non-standard tanks, including railway tanks, gas tanks, etc., have achieved good sales, especially in the domestic market. Advance accounts reached 197 million yuan, and fund-raising projects helped increase performance. Most of the company's quick-freezing equipment and tank container products charge about 30% of prepayment after signing the contract. The company's pre-collected accounts for the four quarters of 2017 were 220 million yuan, 214 million yuan, 224 million yuan and 197 million yuan respectively, all of which remained at historically high levels. To a certain extent, advance accounts can be used as a precursor to the company's performance, and we believe that the company is still expected to maintain rapid growth in 2018. Since its listing, the company has been limited by insufficient tank container production capacity and is actively promoting the construction of fund-raising projects. It is expected to start production in May 2018, and the tank container production capacity will increase from 4,000 units/year to 7,300 units/year. Under a favorable trend where the tank container market space is huge and continues to grow, the company's new production capacity can be fully absorbed by the market. Production capacity bottlenecks will be alleviated to a certain extent, and the company's performance is expected to be significantly boosted. The policy is pushing for the promotion of tank containers, and the domestic market is yet to open. The “Regulations on the Administration of Road Dangerous Goods Transport” issued in 2016 encourage the use of special vehicles such as vans, tanks, and containers to transport dangerous goods. In terms of railways, China's railway container traffic currently accounts for only 5.4% of railway freight, which is far below the level of developed countries. According to the “13th Five-Year Plan” for the Development of Railway Container Multimodal Transport, the degree of standardization of railway transport units, equipment and facilities will be raised, and the use of special containers such as refrigeration, tanks, and dry bulk goods will be promoted. With the introduction of national policies to encourage multimodal transport and the implementation of local subsidy policies for the use of tank containers, the domestic tank container market is expected to experience rapid growth. Profit forecast and investment rating: We expect the company to achieve operating income of 1,321 billion yuan, 1,649 billion yuan and 2,052 million yuan respectively from 2018 to 2020; net profit of 212 million yuan, 279 million yuan and 339 million yuan respectively; EPS of 1.00 yuan, 1.32 yuan and 1.60 yuan respectively, corresponding PE of 22X and 17X/14X respectively. Give a reasonable valuation 28 times that of 2018, with a target price of 28 yuan/share. Maintain a “Highly Recommended” rating. Risk warning: The recovery of the shipping market and global trade fell short of expectations; the commissioning of fund-raising projects fell short of expectations.