Key investment points: Rizhao Port is in a period of rapid growth in performance. Currently, Rizhao Port is in a period of rapid growth in performance. From January to March 2018, it achieved operating income of 1,245 million yuan, a year-on-year increase of 6.99%; incurred operating costs of 878 million yuan, a year-on-year decrease of 0.71%; realized total profit of 260 million yuan, an increase of 54.66%; realized net profit attributable to the parent company of 171 million yuan, an increase of 59.08%; and achieved basic earnings per share of 0.056 yuan. The steam and coal transportation policy in the Bohai Rim region continues to be tightened, and the Wa-Japan Line, an important coal resource channel, will continue to contribute to the increase in coal for Rizhao Port. Recently, the Ministry of Ecology and Environment proposed that by September 2018, the coal transport policy will be further tightened. The scope of the policy will be expanded from the Bohai Rim region to Shandong and the Yangtze River Delta region, and that more coal transportation will shift from automobile transportation to railway transportation. It is expected that with the coal carrying capacity of the Daqin Line and Shuohuang Line being close to saturation, it is expected that the Wari Line will bear a significant portion of the future coal transportation increase in northern China, and will continue to contribute to the increase in coal transportation to its direct port, Rizhao Port. We expect Rizhao Port to increase its coal throughput by 6 million tons due to the Wa-ri Line in 2018. The expected commissioning of the second phase of the first phase of the Rizhao Fine Steel Base is clear. It is expected that the iron ore throughput of Rizhao Port will increase steadily. The first phase of the Rizhao Fine Steel Base project is divided into two stages. The first phase of the project was completed and put into operation in 2017, and the second phase of the project has been fully started. It is scheduled to be put into operation one after another before the end of 2018. The commissioning of the fine steel base is clearly driving the iron ore throughput of Rizhao Hong Kong. We expect to achieve 4 million tons of steel production in 2018, which will drive 10 million tons of cargo throughput, including iron ore and finished steel products. The first step of port integration in Shandong Province has been completed, and the Rizhao Port Group's crude oil and shipping sector business is developing steadily, providing a better development environment for Rizhao Port. In March 2018, Shandong Bohai Bay Port Group was formally established, marking the completion of the first step of the Shandong port integration plan. The promotion of Shandong Province's port integration strategy will effectively enhance the overall competitiveness of Shandong ports. Furthermore, the Rizhao Port Group's crude oil and container sector business continues to expand, and the overall strength of the Rizhao Port Group is steadily improving, creating a better development environment for Rizhao Port. The depreciation period has been extended, and the margin of safety has been strengthened. According to the audit report on the special instructions for changing accounting estimates published by the company on March 20, 2018, the company extended and adjusted the depreciation period for some categories of fixed assets. After this adjustment, depreciation can more accurately reflect the company's actual asset consumption. This adjustment of the depreciation period will improve the response to the company's real profitability, effectively reduce the company's valuation level, and further consolidate the margin of safety. Investment advice. We predict that in 2018-2020, the company's EPS will be 0.20, 0.22, and 0.24 yuan/share, respectively, and the corresponding PE price will be 17, 16, and 14 times the current price. We refer to the PE level of some other listed port companies, and considering that their advantages in railway resources will gradually become prominent, give the company a certain premium, give the company 20-23 times PE in 2018, a reasonable value range of 4-4.6 yuan within 6 months, and give it a purchase rating. Risk warning. China's economic growth fell short of expectations, and the progress of the project fell short of expectations.