Incident: The company released its 2018 semi-annual performance forecast. It is expected to achieve net profit of 23.1268 million yuan to 25.5964 million yuan from January to June 2018, compared to 12.8482 million yuan in the same period last year, an increase of 80% to 100% over the previous year. Comment: Garden design has a long history and a prominent position as a leader in the industry: the company became one of the first Class A garden design units in the country in 1986, and has a long history and culture in the field of garden design. In recent years, the company has successively completed landscape design upgrading tasks for major events such as the “2016G20 Hangzhou Summit”, the “2017 Xiamen BRICS Summit”, and the “2018 Hainan Boao Forum for Asia Annual Meeting”, and has had a good social impact. Meanwhile, on May 29 this year, the company was invited to participate in the design work related to the relevant plot of land in the Xiong'an New Area Development Area and the preparation of the “Xiong'an New Area Street Tree Species Selection and Planting Design Guidelines”, further enhancing the company's influence and standing as a leader in the industry. Keep up with the “design and ecological environment business” development strategy and actively expand the upstream and downstream industrial chain: in 2017, the company formulated the “design and ecological environment business” two-wheel drive development strategy. While maintaining the advantages of garden design, the company actively expanded the upstream and downstream business chain, focused on laying out the general engineering contracting business field, and undertook various engineering project general contracting (EPC) in the Boao region, laying a solid foundation for future transformation and leapfrogging development. As of June 13 this year, the total number of contracts in the company is about 700 million yuan, of which landscape design is the main business, the amount is about 500 million yuan, and the amount of the expanded EPC business is about 200 million yuan. Major contracts have been signed one after another to ensure rapid growth in performance: Since 2018, the company has successively signed major contracts such as the Boao Binhai Avenue Greening and Upgrading Project (EPC), the Boao Road Landscape Renovation and Upgrading Project, and the Shili River Comprehensive Remediation Project Design Project in the Beiyang Green Heart Start Area in Putian City. The project amount reached 102 million yuan, accounting for 55.72% of the annual revenue of 2017, and confirmed revenue of 69.5743 million yuan in the first quarter. The company has successively signed major contracts, which helps the company explore new markets, maintain rapid business growth, further enhance brand awareness, and enhance core competitiveness. Financial forecasting and valuation: The company is expected to achieve net profit of 0.85/1.50/252 million yuan from 2018 to 2020, an increase of 144.8%/76.8%/67.4% year-on-year, corresponding EPS of 0.66/1.17/1.97 yuan. The current stock price is 44.5/25.1/15.0 times PE from 2018 to 2020, maintaining the “Highly Recommended” rating. Risk warning: New business development and implementation do not meet expectations, repayment risks, etc.