More than 2.4 billion dollars of contracts in hand have helped accelerate performance. Better cash flow from projects is expected to improve. The company revealed during the 2017 annual results online briefing that by the end of March, the company and subsidiaries had about 1.8 billion orders in hand, and about 530 million completed and unsettled contracts. Also, considering the Qingdao West Coast PPP project with a total investment of 344 million yuan announced by the company in April this year and the West Section (85 million) contracts for the Shennan Avenue (180 million) and Shennan Avenue (Futian section) landscape lighting upgrade projects disclosed on the bidding platform, the contract amount that the company can convert into revenue in the future exceeds 2.4 billion dollars, which is a significant increase from the 1.28 billion on-going contracts at the end of last year. Considering the short construction period of landscape lighting contracts, most construction periods of less than half a year, revenue and profit are expected to continue to accelerate this year. Also, it is important to note that the company has recently undertaken many projects in Qingdao and Shenzhen. The local financial base where these projects are located is relatively good, and the project payment situation may have improved to a large extent compared to previous projects. It is expected that there will be a certain improvement in operating cash flow this year. The capital raised has been invested one after another. After the completion of the LED lighting R&D and production base, the company's capital of 860 million yuan raised was fully received on April 26. At present, it has begun to be invested one after another, and the efficiency of use is high. Currently, 144 million dollars of raised capital have been used to replace self-raised funds already invested in fund-raising projects (mostly supplementary project support funds), and 200 million dollars have been invested to increase capital in Lu'an Mingjiahui to build an LED landscape lighting R&D and production base. Currently, the proportion of the company's self-supplied lamps is low. After the completion of the LED lighting R&D and production base, the self-supply ratio will be effectively increased, while meeting the demand for highly customized lamps, so that the company's gross margin will continue to remain at a high level. Landscape lighting projects continue to be booming, and we need to pay attention to the possibility that the sector may experience resonance effects in the future. Landscape lighting exactly meets standards such as “improving people's living standards” and “making cities brighter.” In the context of restrictions on local government investment, it has undoubtedly opened up a breakthrough. As China's national strength increases, various large-scale events have increased (such as this year's SCO summit in Qingdao, the 40th anniversary of the reform and opening up, and the anniversary celebrations of some autonomous regions), which has further contributed to the continued boom in the industry. In addition to Mingjiahui, businesses related to listed companies entering the landscape lighting market, such as Riyadh (revenue in the night travel economy sector increased 99% year on year in 2017), Alto Electronics (revenue growth of Qianbaihui in 2017), Huati Technology (revenue for projects focusing on landscape lighting increased 215% in '17), and Zhouming Technology (revenue increased sharply in 2017 in Hangzhou Bainian), and other listed companies entering the landscape lighting market have all experienced significant growth. Attention should be paid to the sector resonance effect brought about by the continued ultra-rapid growth in the future performance of the landscape lighting business of these companies. Investment advice The company's orders since this year are close to the whole of last year, and the efficient use of capital raised will bring the company's performance growth rate to the next level. We raised the company's EPS in 18-20 to 1.09, 1.86, and 2.85 yuan/share (originally considering the impact of this increase in share capital dilution, 18-20 EPS was 1.00, 1.60, and 2.40 yuan/share). The improvement in the quality of the company's projects is expected to improve the company's operating cash flow, and the future sector may experience sector resonance effects under the continued boom in the industry. These factors will increase the company's valuation (referring to the sector effects of decoration and garden engineering in the past, there will be at least a 10% increase). Combining the increase in EPS and valuation, we raised the company's target price to 31.5 yuan, corresponding to the target PE 29 times (the original target price of 26 yuan, corresponding to the target PE 26 times), and maintained the “buy” rating. Risk warning: Project repayment falls short of expectations, merger and acquisition integration falls short of expectations