Incident: Recently, Haodangjia released its 2017 annual report. In 2017, the company achieved operating income of 1,208 billion yuan, an increase of 13.97% over the previous year; net profit attributable to shareholders of listed companies was 53.5309 million yuan, an increase of 24.15% over the previous year. Basic earnings per share were 0.04 yuan/share. Comment: One center has three basic points, and all businesses go hand in hand. “One Center” is the sea cucumber industry that the company has established as the dominant core. The “three basic points” are the three major businesses surrounding the sea cucumber industry, including breeding business, processing business, and fishing business. In 2017, the company's sea cucumber products (including aquaculture, processing and fishing) achieved revenue of 521 million yuan, accounting for 53.15% of total revenue, accounting for 64.62% of gross profit; in 2017, the company's aquaculture business (including sea cucumber, jellyfish, kelp, etc.), processing business (including freshly processed freeze-dried sea cucumber, deep-processed products, etc.), and fishing business (including sea cucumber, squid, etc.) were 379 million yuan, 638 million yuan, and 184 million yuan in revenue, respectively. The proportions are 53.03%, 32.55%, and 13.72% have basically formed a “troika, going hand in hand” situation. It is worth noting that the company continues to increase its investment in the marine fishing industry, and its share of future performance contributions is expected to increase further. By the end of 2017, the company had built 44 boats, including 19 lighted net fishing boats, 16 trawlers, and 1 large carrier, operating at fishing grounds in the South China Sea, Yellow Sea, East China Sea, North Pacific, etc., and equipped with the construction of 50,000 tons of cold chain warehouses and an annual production capacity of 50,000 tons of fishmeal. In addition, 8 squid fishing boats were upgraded in 2017. 4 more boats had already been built and went to sea in February. In 2017, the amount of products caught by the company reached 826.64 million tons, a significant increase of 141.94% over the previous year. We believe that the company will continue to focus on “one center and three basic points”. The three businesses are similar to the troika to drive the company's steady development. The revenue side is rising steadily, participation is booming, and market expansion is strong. In terms of price, sea cucumber production capacity was significantly reduced in 2017, the industry's supply and demand pattern improved, and the bid boom increased. The average foreign sales price of the company's fresh sea cucumber was 114.68 yuan/kg throughout the year, an increase of 28.49% over the same period last year. In terms of sales, the company continues to strengthen domestic market development efforts and enhance brand influence through multiple channels. The company obtained a direct sales license in February 2017. Traditional franchisees broke through store restrictions, transformed into retail sales in the consumer market, and organized nearly 1,000 consumers to come to Haodang to witness the authenticity of “organic ginseng”. In addition, more than 2,000 live sea cucumber sales programs were set up on national TV shopping platforms, with a total broadcast time of more than 80,000 minutes to carry out TV shopping and sales activities to promote systematic development and develop 100,000 members. The above marketing measures had a positive impact on the increase in the company's brand popularity. The company's revenue from sea cucumber products increased by 33.98% year-on-year during the reporting period, and the year-on-year revenue growth rates of the aquaculture, processing and fishing business in 2017 were 13.70%, 17.24%, and 6.65%, respectively. We believe that the seafood industry has entered an upward boom, and that the company will continue to steadily promote channel expansion and brand building, and the revenue growth rate of the company's various businesses is expected to increase further. The cost side continues to decline, and the advantages of breeding have become prominent. Seedling costs account for 60% of sea cucumber farming costs, and the amount of seedling costs mainly depends on the survival rate of seedlings and feed for seedlings. The company has now achieved self-sufficiency in sea cucumber seedlings. The quality of seedlings grown in outdoor cages is close to that of wild ecological seedlings. The quality of seedlings grown in outdoor cages is lower than that of indoor seedlings, and the survival rate is higher. For the future, the company can industrialize sea cucumber seedlings, achieve high efficiency and large-scale management of the sea cucumber industry, broaden more development space, and add a fermentation workshop for sea cucumber bait to improve the growth of seedlings. During the reporting period, in the case of a year-on-year increase in the revenue of sea cucumber products, the company's total sea cucumber seed fee did not increase but fell. The sea cucumber seed fee decreased by 14.96% compared to the same period last year, and the cost ratio decreased by 7 percentage points to 59% year on year. Due to the relatively high cost of sea cucumber products, the total cost of sea cucumber products did not increase but decreased by 23.88% compared to the same period last year, affecting the company's gross margin of sea cucumber products increased sharply by 13 percentage points to 43% year on year. We believe that self-growing and self-growing seedlings brings a clear cost advantage to the company, and there is still room for a downward trend on the cost side in the future, which will have a positive impact on the company's overall profitability. Profit forecast and rating: We expect the company's diluted earnings per share for 18-20 to be $0.05, $0.06, and $0.08, respectively. Maintain an “gain” rating on the company. Risk factors: extreme weather risk, risk of product price fluctuations, scale expansion falling short of expectations, channel expansion falling short of expectations, risk of policy changes, etc.