Key investment points Q1 revenue increased 70%, and the increase in expenses resulted in a net profit loss of 72 million yuan to the mother. The company's revenue side grew rapidly, driven by environmental protection and ecological landscape. 2018Q1 revenue achieved operating income of 1.3 billion yuan, +69.8%; net profit loss to mother was -0.7 billion yuan, compared with a loss of -68 million yuan in the same period last year; corresponding EPS -0.05 yuan, or -0.003 yuan for the same period last year. At the same time as the company's revenue in the first quarter increased, losses increased year-on-year, mainly due to a sharp increase in the cost of setting up multiple regional centers and related personnel. The gross profit margin and expense ratio are rising, operating cash flow is moving in and out, and the net outflow of investment cash flow is increasing. 2018Q1's gross sales margin increased steadily and slightly, +2.27pcts to 25.87% year-on-year. The company's three expense ratios were 32.74%, +4.38pcts. Among them, sales management fee rate/management expense rate/ financial expense ratios were 2.5%/20.1%/10.2%, and +1.4pcts/+0.1pct/+2.9pcts, of which management expenses were +70.38%, mainly due to the company's development of regional centers leading to a significant increase in expenses, accruing equity incentives of 37.86 million yuan, and financial expenses +137.3% year-on-year. The confirmed interest expenses increased due to the increase in bank loans. Q1 Net cash flow outflow of 480 million yuan, a year-on-year increase of 630 million yuan, due to reduced project repayments and increased procurement of engineering materials; increased PPP project company expenses and joint venture equity investment payments led to a net cash flow outflow of 730 million yuan, an increase of 420 million yuan over the previous year; net cash flow inflow from financing activities was +89.8% year-on-year to 1.19 billion yuan, due to an increase in bank loans in the current period. New engineering orders in the first quarter increased tenfold year-on-year, and epitaxial mergers and acquisitions improved the industrial layout. The company signed 24 new project orders in the first quarter, totaling 6.82 billion yuan, 610 million yuan in the same period last year, and 22 design orders, totaling 67 million yuan, or 6.8 million yuan in the same period last year. At the same time as orders are rising, the company is speeding up the implementation of project financing. According to our estimates, about 4 billion yuan of projects have been funded since this year. In addition, the company strengthened outward mergers and acquisitions, acquired Guangzhou Nanxing Construction Project for 135 million yuan during the reporting period; completed 100% ownership of Guangzhou Huanfa, increased its capital to the Shenzhen Water Planning and Design Institute, and continuously improved the industrial layout. Multi-channel financing, continuous improvement of incentive mechanisms. The company has successively landed 1.1 billion yuan of convertible bonds, 1 billion yuan of medium-term notes, 2 billion yuan of ultra-short financing notes, and 400 million yuan of short-term loans, continuously accelerating the broadening of financing channels and providing sufficient financial guarantees for the company's business development. In addition, the company completed the second phase of the 840 million yuan employee stock ownership plan in June of last year, covering nearly 1,000 management and key employees; the draft stock option incentive plan was announced immediately in September. Recently, the plan was adjusted to grant 114 million stock options to 459 core management and technical personnel. The assessment performance target was +34.6%/30.6%/30.5% year-on-year net profit for 2018-20. Bind core interests and demonstrate confidence in growth. risk factors. The PPP project financing implementation rate fell short of expectations, and increased competition led to a decline in the industry's gross margin. Profit forecasting, valuation and investment ratings. The company's Q1 revenue increased at the same time as being affected by the expense side, resulting in a net profit loss. The gross margin expense ratio is rising. Considering the company's high increase in new signings in the first quarter, order financing continued to be implemented, and active expansion, considering that the current financing side is tight and PPP projects continue to be standardized, the company's 2018/19/20 EPS forecast of 0.72/1.03/1.43 yuan was maintained, and the “buy” rating was maintained.