Report Summary: The leading position in the region is stable. The expansion of government infrastructure helped to increase orders. The company signed 966 million yuan of new survey and design orders in 2016 (YOY = 318%), and H1 signed 600 million new orders in '17. According to the transportation infrastructure plan of Henan Province, infrastructure investment was 50.6 billion yuan in 17 years, and infrastructure investment was unabated in '18. It is planned to invest 47.2 billion yuan. As a leading survey and design company in Henan Province, the company is expected to continue to benefit from new orders. Regional expansion has achieved remarkable results. Overseas business contributed to incremental performance. The company is deeply involved in the domestic market of Henan Province and is gradually expanding outside the province and overseas regions. In 2017, the share of revenue from regions other than central China increased to 17.01% (up 3.43 percentage points), and the project layout expanded to Yunnan, Tibet, Guangxi, and Xinjiang. The overseas business market layout is becoming more mature. Projects spread across more than 20 countries and regions, including Asia Pacific, Africa, and Latin America. In 17 years, revenue reached 37 million yuan (YOY = 675.97%), increasing its share to 3.92%, which has become a new performance growth point. Cost advantages are compounded by effective cost control, and the profit level is expected to continue to increase steadily. The company's expense ratio will continue to decline, and the profit level will rise steadily. The gross profit margin for '17 was 46.96%, up 2.18 percentage points from '16, which is significantly higher than the average gross margin level of comparable companies in the same industry (39.30%). The expense ratio was 13.45%, a decrease of 2.38 percentage points. The company has regional labor cost advantages, focuses on cost control, continuously strengthens cost control, and the share of high-profit survey and design business is gradually increasing, and the profit level is expected to continue to rise. It plans to acquire 67% of Zhongyun International's shares, and asset restructuring is progressing steadily. The company recently issued an asset restructuring announcement to acquire no less than 67% of Zhongyun International's shares. The target company is in the same industry as the company, has more than 40 years of industry experience, covers more than 20 domestic provinces, cities and autonomous regions, and establishes engineering design consulting services in Guinea, India, Laos, Uzbekistan and other countries. Currently, the asset acquisition project is progressing steadily, and it is expected that the synergy effect will be fully exploited after the restructuring. Project selectivity will be further improved, and the competitiveness of the company's industry will be enhanced. The profit forecasting and investment advice company is a regional industry leader. It is deeply involved in the provincial market while continuously promoting regional expansion, and has a high guarantee of abundant order performance. The company's revenue for 2018-2020 is estimated to be 1,331 million yuan, 1,840 million yuan and 2,467 million yuan, respectively, with net profit attributable to the parent company of 310 million yuan, 422 million yuan, 565 million yuan, and EPS of 4.31 yuan, 5.86 yuan, and 7.84 yuan. Corresponding to the current stock price PE is 20X/15X/11X, respectively. The first coverage gives a “Recommended” rating. The risk indicates a decline in infrastructure investment, and overseas business expansion falls short of expectations.