The company released its 2018 quarterly report: during the reporting period, the company achieved total operating revenue of 1,577 billion yuan, a year-on-year increase of 35%; realized net profit of 81 million yuan, an increase of 83% over the previous year; and net profit after deduction of 23 million yuan, a year-on-year decrease of 29.5%. The company's current investment income was mainly due to the sale of shares in participating companies. Financial expenses rose sharply, mainly due to a large increase in interest-bearing liabilities and a significant impact on the exchange gains and losses of subsidiaries. The company's historical profit scale for the first quarter was relatively small, and fluctuated quite a bit. It is not a strong guideline for the whole year. It is expected that operations will tend to be normal and steady in the following quarters. Maintain a “Highly Recommended - A” rating and maintain a target price of 20-22 yuan. Rapid revenue growth: The company achieved revenue of 1,577 billion yuan in the first quarter, up 35% year on year; realized net profit of 81 million yuan, up 83% year on year; net profit after deduction was 0.3 million yuan, down 29.5% year on year. Revenue has maintained relatively rapid growth, indicating that the company's original business development in the automation equipment and power sectors is relatively healthy. Furthermore, it also shows that Hunan Zhongli has made a certain contribution. Financial expenses affect the company's performance: The company's gross margin for the first quarter increased by 1.26 percentage points over the same period, but after deducting non-profits, decreased by 29.5%, mainly due to financial expenses affecting the company. During the reporting period, the company's financial expenses were 146 million yuan, a sharp increase of 177% over the previous year. On the one hand, the company's interest-bearing debt increased after successive mergers and acquisitions in the past two years, and Hunan Zhongli's merger and acquisition was still in the investment period; on the other hand, the subsidiary Yuntaili's overseas business accounted for a relatively high share, and the impact on exchange gains and losses was significant. The traditional sector is growing steadily, and the equipment and new energy industry is growing rapidly: the company's traditional power equipment and materials business has been growing steadily in recent years. In terms of subsidiaries developed in recent years, Zhuhai Yuntaili has maintained healthy development, and Changyuan Huasheng assets have entered the harvest period. Hunan Zhongli is still in the investment stage, while Shanghai and Eagle are also developing relatively steadily. The company's historical profit scale for the first quarter was relatively small, and fluctuated quite a bit. It is not a strong guideline for the whole year. It is expected that operations will tend to be normal and steady in the following quarters. Investment advice: The company's revenue is expected to maintain a moderate growth rate, and the equity dispute is being settled, but in the short term, it will still be affected by financial expenses and asset impairment. It maintains a strong recommendation rating and maintains a target price of 20-22 yuan. Risk warning: Equity disputes cannot be resolved easily, and there is a risk of impairment of goodwill and bad debts.