Incident: 2017 revenue of 8.188 billion yuan, an increase of 79.04%; net profit to mother was 757 million yuan, an increase of 45.02%, and EPS of 0.5 yuan. The 2018 budget targets revenue of 12.7 billion yuan, an increase of 55%, and net profit to mother of 1,136 billion yuan, an increase of 50%. Comment: 1. The ecological and environmental protection sector performed well. Sufficient orders and diversified financing channels boosted continued high performance growth. In 2017, the company achieved revenue of 8.188 billion yuan, an increase of 79.04% over the previous year. We believe that it was mainly due to the company's sufficient on-hand orders and concentrated PPP business implementation (winning a total of 31.82 billion yuan in annual bids, an increase of 161.2%, of which PPP projects amounted to 25.735 billion yuan, accounting for 81%). Excluding Guangzhou Huanfa, Galaxy Garden, and Tiehan Construction (2017 Q3), comparable revenue for the same period in 2017 was 6.622 billion yuan, up 75.54% year on year. Comparable net profit for the same period was 592 million yuan, up 49.56% year on year, and endogenous growth is still strong. By sector, the company's transformation has achieved remarkable results. The ecological and environmental protection sector contributed 3.78 billion yuan, surpassing municipal gardens, accounting for an increase of 23.35% to 46.17%, with a growth rate of 254.01%; the traditional municipal garden sector continued its steady growth trend, with revenue of 3.284 billion yuan, accounting for 40.11%; ecotourism and design and maintenance were emerging pan-ecological growth points, with growth rates reaching 79.49% and 57.31%, respectively. By region, the seven major regions have a more balanced layout. The business is concentrated in Southwest China, South China, and Northwest China, accounting for 34.01%, 25.90%, and 12.81% of revenue respectively. Among them, the growth rate in the northwest region was particularly rapid, reaching 415.45%. In addition, through diversified financing channels, the company reported a financing balance of 8.447 billion yuan at the end of the reporting period, and sufficient funds provided an effective guarantee for it to comprehensively and continuously promote the operation and implementation of PPP projects. Net profit from the mother increased by 45.02% in 2017. We believe that the main reasons why the increase was lower than revenue: 1) gross margin declined slightly; 2) the company vigorously promoted regional layout, increased related personnel and operating costs, and sales expenses increased sharply by 566.44%; 3) the calculation of 25.24 million yuan in equity incentive expenses, while recovering 46.94 million equity incentive expenses in the same period last year caused a sharp increase in management expenses; 4) government subsidies decreased by 37.2557 million yuan compared to last year. 2. Gross margin, net margin decreased, cash flow deteriorated slightly, and debt ratio increased significantly. Due to the increase in operating costs and period expenses, the company's gross margin and net margin decreased by 1.57 and 2.30 pp, respectively, to 25.22% and 9.26%. The payout ratio and payout ratio decreased by 5.60 and 1.87 pp, and operating cash flow deteriorated slightly. Mainly, the PPP project issuer's settlement and payment schedule lagged behind completion progress, project repayment lagged behind project investment, and cash flow quality needed to be improved. The debt ratio increased sharply by 14.61 pp to 68.68%, reaching the highest level in history. Short-term solvency declined slightly, mainly due to the increase in debt size brought about by business expansion. In the future, as the regional layout center gradually stabilizes, the company's profitability and solvency can be expected to improve. 3. Strengthen deep regional cultivation, extend the ecological industry chain, and innovate the diversified industrial layout. The company started with ecological restoration and landscaping business, increased its connotation and epitaxial strength, successively merged and acquired companies such as Galaxy Garden, Guangzhou Huanfa, and Tiehan Construction to extend the ecological environment industry chain with ecological environmental protection, ecological landscape, ecotourism, and ecological agriculture as the core; seize PPP to accelerate the release of market demand and welcome opportunities during the golden development period, supported by a number of high-tech enterprises to promote diversified business role upgrades and strive to achieve the transformation of resource integrators. Furthermore, the company will continue to improve the national market layout to form eight major market regional centers in East China, South China, Southwest China, Central China, Northwest China, Beijing, Yunnan and Xinjiang to promote collaborative development. 4. Full of on-hand orders, sufficient capital and equity incentives to promote project implementation, maintain sufficient “Highly Recommended - A” rated business projects, diversified and long-lasting financing channels, superimposed equity incentives to accelerate order execution, use ecology and environmental protection as the center for transformation and development, actively achieve internal and external development, integrate and expand the industrial chain, and create a diversified layout. We expect the company's EPS to be 0.74, 1.05 yuan/share, and PE to be 13.6, 9.6 times, and maintain the “Highly Recommended - A” rating in 2018 and 19. 5. Risk warning: Investment falls short of expectations, business development falls short of expectations, repayment risk