Matters: The company's net profit growth rate in the first quarter of 2018 reached 66%, in line with expectations. At the same time, the company announced the acquisition of 51% of the Environmental Remediation Company Zhejiang Integrated Environment and the transfer of 20% of the shares of Luming Construction, a partner of Lancheng and Greentown. A series of mergers and acquisitions in the industrial chain are expected to further strengthen the company's competitiveness and lay a good foundation for future business development. Maintaining the company's profit forecast for 2018-2020, EPS was 1.03/1.43/1.92 yuan, respectively. Maintain the target price at $18.61 and maintain the “Strong Push” rating. Main opinion 1. The first quarter performance growth rate reached 66%, in line with expectations. The company's net profit for the first quarter of 2018 was 128 million yuan, a year-on-year growth rate of 66%, in line with expectations (55%-85%). We believe 2018 will continue to be a year of rapid growth for the company. The market believes that the company's garden business may be affected by the tightening of PPP policies and the slowdown in fixed investment. We believe that the impact of PPP inventory clearance and the suspension of individual regions has been fully reflected, and the possibility of marginal deterioration in the future is extremely small. The company is pragmatic in selecting garden projects. The project size is moderate, the location selection is reasonable, and it is expected to maintain the rapid growth trend of the past two years. On the other hand, the auto parts business is benefiting from the continued recovery in the heavy truck market. It is expected that it will still provide a considerable profit contribution and will not slow down the company's overall performance growth rate. 2. M&A integration continues to advance. In the future, it may bring more collaboration to the company's business. The company will announce the acquisition of 51% of the shares of the environmental restoration company Zhejiang Integrated Environment. Zhejiang Integrated Environment provides services such as environmental management, ecological restoration, and construction of municipal supporting facilities. It has synergy and complementarity with the business of the company's subsidiary Saishi Garden. The normal implementation of this investment transaction helps the company to further broaden its business development channels and business scope, enhance the company's ability to undertake projects, and enhance profitability. At the same time, the company transferred 20% of the shares of Blue City and Greentown partners Luming Construction. We believe that the company's current foreign investment has further strengthened its close relationships with core customers Greentown and Blue City, and its ability to obtain orders from such major customers will be enhanced in the future. 3. Investment advice: We maintain the company's profit forecast for 2018-2020. Net profit attributable to mother is RMB 835/11.51/RMB 1,546 million, and the corresponding EPS is RMB 1.03/1.43/1.92. Maintain the target price of 18.61 yuan and maintain the “strong recommendation” rating. 4. Risk warning: The municipal garden business is at risk of government repayment; the progress of obtaining and completing future orders falls short of expectations.