Profit for 1H18 is predicted to increase 3% year over year. We expect the company's net profit to increase 3% year over year to HK$7.2 billion in the first half of this year, which is better than the market's expected year-on-year decline in performance. This is mainly due to the strong increase in demand for crude oil imported from Qingdao and Rizhao terminals in China, the steady increase in the company's LNG carrier voyage, and the decline in profit on the Yuji Line less than market expectations. The company's current stock price is at a historically low of 0.7 times the net market ratio in 2018, yet the company's return on net assets and dividend ratio are expected to reach 12.8% and 4.5% respectively this year. The valuation is attractive and reaffirms the “recommended” rating. Focus on the main points, profit on the Yuji Line is expected to bottom out and pick up again. Although the Yuji Line was affected by the reduction in management and transportation costs in the first half of this year for about 2 months longer than in the second half of last year, we expect the Yuji Line to save about HK$55 million in gas storage leasing costs in the first half of the year, thus partially offsetting the negative impact of the reduction in pipeline transportation costs. We conservatively estimate that the operating profit of the Yuji Line in the first half of the year fell by about 30%-40% year on year, but it rebounded from the bottom of profit in the second half of last year and reached about HK$200 million. The gas transmission capacity of the Yuji Line is expected to expand to 5 billion square meters in '19. According to Sinopec, the Dongsheng gas field, also located in the Ordos Basin, reached 1 billion m2/year in the first half of this year, and is expected to reach 3 billion m2/year of production capacity by 2020. Thanks to the stable supply of new gas sources, Guande is expected to expand the gas transmission capacity of the Yuji Line from the current 4.1 billion square meters/year to 5 billion square meters/year by the end of 2019, which is expected to bring room for significant improvement in pipeline performance starting in 2020. Refined crude oil imports remain strong. We expect that in the first half of this year, the crude oil terminal handling volume of Guande Holdings and its shares will increase by 8.0% year on year, higher than the average growth rate of 5.8% in China. This is mainly due to the rapid increase in the handling volume of crude oil terminals in Qingdao and Rizhao, driven by strong import demand from China's geological refineries. Considering the high operating leverage characteristics of terminal assets, the profit growth rate of the terminal business is expected to exceed 8.0%. The LNG carrier business is expected to grow steadily. As the fifth and sixth carriers of the APLNG project are put into operation on time, we expect the cumulative number of months of operation of carriers in the first half of this year to increase from 23 months in the first half of last year to 42 months. At the same time, we expect the cumulative number of operating months throughout the year to increase from 56 months last year to 90 months. The valuation and recommendations maintain the profit forecast and target price of HK$5.84, corresponding to a price-earnings ratio of 9 times /8 times the 2018/19 price-earnings ratio and 70% upside. The company's current stock price corresponds to a price-earnings ratio of 6 times /5 times the 2018/19 price-earnings ratio. The risk is that the growth rate of China's crude oil imports is slowing down; asset depreciation.