The company recently announced its 2017 annual report. In 2017, it achieved revenue of 2,565 billion yuan, an increase of 69.10% over the previous year; net profit of 244 million yuan, an increase of 74.96% over the previous year; and transferred 6 shares to all shareholders for every 10 shares from the capital reserve fund. Our comments are as follows: The scale of business continues to expand. In recent years, the company with sufficient orders has actively expanded into the three major sectors of municipal engineering projects, water environment management, and ecological and cultural tourism projects on the basis of consolidating real estate and gardens. According to the total number of new contracts signed by the company in the fourth quarter, the mid-term bid order for 2017 was 3.42 billion yuan, of which 3 new PPP projects were signed, with a total amount of 625 million yuan, mainly municipal projects. By the end of 2017, the company had 610 contracts in progress, with an amount of 4.844 billion yuan, 1.89 times the revenue, including the Zunyi Chinese herbal medicine cultivation tourism area PPP project with a contract amount of 320 million yuan and the Shuihu Film and Television Cultural Experience Park EPC project of 730 million yuan. During the reporting period, the company announced the signing of a total of 4 framework agreements, and the investment scale of the announced agreements reached 4.55 billion yuan. As future cooperation projects are implemented one after another, performance is expected to continue to grow. The revenue growth rate reached a record high. The gross margin declined slightly. In 2017, the company achieved revenue of 2,565 billion yuan, an increase of 69.10% over the previous year, and the growth rate increased by more than 24 percentage points over last year. The company's annual report revealed that the number of municipal business orders in 2017 has surpassed the real estate business, and the municipal business volume is expected to expand further in 2018. In the same period, the company's long-term receivables increased by 237 million yuan, mainly due to the company's strong commitment to municipal projects and a significant increase in public municipal financing projects. The company's subsidiary and Chinese and foreign construction investment jointly established China Construction Technology Wealth Company to provide financing channels for investment in mergers and acquisitions or PPP projects, and its ability to integrate resources is prominent. The gross margin for the same caliber was 18.77% in 2017, excluding the increase in business reform, down 2.10 percentage points from last year. The decline in gross margin may be due to intense competition in the garden industry and rising labor costs. The fee ratio for the period decreased, and the net profit increased significantly. The company's expense ratio for the period 2017 was 6.20%, down 2.05 percentage points from the previous year. Among them, the management expense ratio was 5.23%, down 1.81 percentage points from last year, mainly due to the expansion of business scale and high revenue; the financial expense ratio was 0.97%, a slight decrease of 0.24 percentage points from last year. The company accrued asset impairment of 29.61 million yuan, an increase of 9.31 million yuan from the previous value, mainly due to an increase in accrued bad debt losses. Overall, the company's net profit margin was 9.52%, up 0.32 percentage points from the same period last year. The company received net profit of 244 million yuan, a year-on-year increase of 74.96%, and is still in a high position. Operating cash flow deteriorated slightly. The payout ratio of companies with more capital after allotment of shares was 0.62, down 19.78 percentage points from last year, and the payout ratio was 0.65, down 5.89 percentage points from last year, mainly due to the sharp increase in operating income and operating costs during the reporting period. Taken together, operating cash flow deteriorated by 206 million yuan. The company recently completed the allotment of shares, raised 820 million yuan, and has more sufficient capital on hand. Investment suggestions: The company has plenty of orders in hand; actively expands equity financing channels; the cost ratio is well controlled during the period, and net profit has increased significantly. We maintained the growth rate previously predicted, but due to changes in the company's share capital after allotment of shares, the company's EPS from 2018 to 2020 became 1.13, 1.43, and 1.73 yuan/share, corresponding PE of 15, 12, and 10 times. The industry's valuation has continued to decline by 20% since October due to investment behavior. Coupled with the impact of the company's stock allotment, the company's target price was lowered accordingly, from 28.16 yuan to 21 yuan, maintaining the “buy” rating. Risk warning: The implementation of PPP projects fell short of expectations, and the rate of project repayment slowed