Investment highlights: Incidents: In '17, the company achieved revenue of 8.188 billion yuan, an increase of 79.04%; net profit to mother was 757 million yuan, an increase of 45.02%; net profit after deducting net profit of 724 million yuan, an increase of 47.24%. The plan for profit distribution and capital transfer from the capital reserve fund is to distribute a cash dividend of 0.50 yuan (tax included) to all shareholders for every 10 shares, and to transfer 5 shares for every 10 shares to all shareholders. The high growth in performance was in line with expectations, and the performance of new orders was impressive. Excluding the impact of the 16-year equity incentive fee recovery of 46.94 million yuan and the 17-year equity incentive fee of 25.24 million yuan, the adjusted net profit for 16 and 17 was 482 million yuan and 778 million yuan (assuming a tax rate of 15%), then net profit to the mother also increased by 61.47% after the adjustment in '17, and the performance grew faster. The company won a total bid amount of 31.82 billion yuan in 2017 (of which the total amount of PPP projects was 25.735 billion yuan, accounting for 81%), an increase of 161.2% over the contract amount of 12.184 billion yuan in 2016, laying a solid foundation for subsequent high performance growth. Moreover, in '18, the company plans to win bids for projects worth more than 50 billion yuan. According to the company's budget announcement, the company expects to achieve revenue of 12.7 billion yuan in 2018, with a target growth rate of 55%; net profit to mother is estimated to be 1,136 billion yuan, an increase of 50% over the same period. The 18Q1 company expects a loss of 7000 to 75 million yuan (17Q1 is a loss of 4.0937 million yuan). Affected by the “increase in business”, the consolidation of Nanxing Construction, and the decline in investment income, etc., the net attributable interest rate declined. The gross profit margin in '17 was 25.22%, down 1.57pct year-on-year, or was affected by the combination of “business change and growth” and Nanxing Construction. The cost rate for the period was 15.38%, down 0.19pct year on year. Among them, the sales expense ratio was 1.26%, up 0.92 pct year on year (several regional centers were established, and related personnel increased significantly); the management fee ratio of 10.46% decreased by 1.15 pct year on year; and the financial expense ratio was 3.66%, up 0.04 pct year on year (due to increased bank loans and rising interest rates). Overall, the net attributable interest rate of 9.25% decreased by 2.17pct year over year. The company's asset impairment losses in '17 decreased by 32.97% year-on-year compared to '16, and investment income decreased by 16.78% year-on-year compared to '16. PPP is mostly combined, and operating cash flow has deteriorated. The long-term equity investment of the company's parent company increased by 1,978 billion yuan, but the long-term equity investment in the consolidated statement decreased by 1.48 million yuan. It can be seen that the equity investment in PPP project companies was partially offset by the subsidiary's owners' equity interests in the consolidated statement. We believe that most of the company's PPP projects are treated in a consolidated statement. The net operating cash flow outflow in '17 was 855 million yuan, up 36.21% from the net outflow in '16. The main thing is that the settlement and payment progress of the project contractor usually lags behind the company's completion progress (revenue collection decreased 5.6 pct year on year from 57.24% year on year, and current payment rate decreased 3.9 pct year on year from 61.42% year on year). The company's net investment cash flow in '17 was 1.709 billion yuan, a year-on-year deterioration of 67.08%. Of these, the upfront costs of PPP projects paid reached 1,658 million yuan, a significant increase from 190 million yuan in '16. Profit forecasting and valuation. The company's orders are growing well, and the employee stock ownership plan has sufficient incentives such as purchases+incentive funds+equity incentives and additional underwriting employee holdings. The company's EPS for 18-19 is expected to be 0.79 yuan and 1.05 yuan, giving 18 times the PE 17 times, and the target price for 6 months is 13.43 yuan, maintaining the “buy” rating. Risk warning. Order execution falls short of expectations; risk of capital shortage.