The company announced its 2017 annual report. It achieved annual revenue of 682 million yuan, an increase of 64.02% over the previous year, and realized net profit of 174 million yuan, an increase of 72.72% over the previous year. At the same time, the quarterly report for '18 was released, achieving revenue of 153 million yuan, an increase of 62.44%, and net profit of 34 million yuan, an increase of 69.68%. Our comments are as follows: Revenue grew rapidly, and gross margin remained high. During the reporting period, the company successively signed a total of construction contracts and framework agreements for lighting projects with the governments of Hanzhong in Shaanxi, Lu'an, Anhui, and Shanghai. Recently, it also signed 344 million PPP contracts with the Qingdao government, which contributed to the night view of the SCO summit in Qingdao, and there were plenty of orders in hand. The company achieved revenue of 682 million yuan in 2017, an increase of 64.02%. By region, the company has a business layout in northwest China, southwest China and other regions. Among them, the northwest region accounts for the largest revenue share of 33.51%, while the East China region and southwest China account for 29.85% and 11.45% respectively. The company's revenue for the first quarter of 2018 was 153 million yuan, an increase of 62.44% over the same period last year, and a good start. As demand for urban landscape lighting projects continues to increase and the night tour economy continues to catalyze, the company's revenue is expected to maintain rapid growth. In 2017, the company's gross margin of the same caliber was 52.5%, an increase of 1.2 percentage points. The reason for the high gross margin is mainly due to the high demand for personalized customization of urban landscape lighting projects, the dominance of government investment, and the high entry threshold for enterprises. At the same time, the overall gross margin of the industry has increased due to various factors such as healthy competition within the industry. In the future, the company's entire lighting engineering industry chain will be further improved to further reduce costs, and gross margin is expected to remain high. There was an increase in the period's expense ratio, and net profit from the mother achieved a relatively rapid increase of 18.43% during the period, an increase of 0.16 percentage points. Among them, the sales expense ratio was 6.23%, a decrease of 0.2 percentage points, the management expense ratio was 10.70%, and the same decrease was 0.51 percentage points. This is due to the fact that management expenses were more rigid than revenue and revenue increased sharply; the financial expense ratio was 1.50, an increase of 0.87 percentage points, due to the increase in interest expenses brought about by the increase in the company's financing amount. Asset impairment losses were $28 million, a year-on-year increase of 43.86%. Taken together, the company achieved net profit of 174 million yuan in 2017, an increase of 72.72%. Net profit for the first quarter of 2018 increased by 69.68% to $34 million, maintaining a high profit growth rate. Benefiting from factors such as characteristic towns, PPP construction, and increased demand for lighting projects related to urban development, the company expects net profit from January to June 2018 to increase significantly compared to the same period. Operating cash flow has deteriorated. The fixed increase is expected to be completed in May, which will greatly improve the cash situation. The company's earnings ratio in 2017 was 0.1958, a decrease of 0.12 percentage points; the payout ratio was 0.5805, a decrease of 0.15 percentage points. Operating cash flow fell 102.68% year on year to -236 million yuan due to an increase in advance capital due to an increase in the number of projects undertaken by the company. However, the company's operating cash flow for the first quarter of 2018 was -34 million yuan, an improvement over the same period last year. According to the company's annual reports, a fixed increase of no more than 880 million yuan is expected to be issued in May 2018. This will further enhance the company's capital strength, reduce the balance ratio, and guarantee the growth of the company's performance. The company has completed the stock purchase for the first employee stock ownership plan. The average transaction price is 23.94 yuan/share, which will further stimulate the company's business vitality. Investment advice: The company has double qualifications and is in the first tier of the landscape lighting industry. It has strong ability to obtain orders, a high order guarantee factor, and performance is in line with expectations. It is expected to continue to grow at a high level in the future. We maintain the 2018-2020 EPS of 1.15, 1.83, and 2.74 yuan/share, corresponding PE of 17, 11, and 7 times, and maintain the “buy” rating and target price of 26 yuan. Risk warning: the economic development of night tours falls short of expectations; project payback falls short of expectations