Financial conditions: The performance for the first half of the year fell 48%, and the second quarter improved markedly. The company's operating income for the first half of 2018 was 190 million yuan, a year-on-year decrease of 16.9%, net profit of 2014 million yuan, a decrease of 47.9%, and net profit after deduction of 14.333 million yuan, an increase of 1.7% over the previous year. Among them, net profit for the first and second quarters was -14.88 million yuan and 35.02 million yuan respectively, up 24.8% in the second quarter. The company's operating income declined in the first half of the year, mainly affected by the construction of Wuyishan Avenue. Net profit after deduction increased, mainly due to the company's increased control on the cost side, and sales, management and financial expenses were reduced by 5,037 million yuan, 6.43 million yuan, and 10.28 million yuan respectively. In terms of profitability, the company's gross margin and net profit margin in the first half of the year were 33.5% and 10.5%, respectively, down 3.6 and 6.4 percentage points from the previous year. The gross margin and net profit margin for the second quarter were 44.1% and 26.1%, respectively, down 0.2% and up 8.6% year on year. By business: The performance of all scenic spots declined. Environmental passenger transport was still the main source of profit. In the first half of 2018, the net profit of Environmental Passenger Transport, Baofeng Lake and Zhangjiajie China Travel was RMB 22.47 million, RMB 623 million and RMB 800,000 respectively, down 29.8%, 66.8% and up 10.1% from the previous year. Among them, environmentally friendly passenger transport is the company's main source of net profit. The Dayong Ancient City Project, Zhang International Hotel, and Yangjiajie Cable Car lost RMB 12.47 million, RMB 3.14 million, and RMB 4.39 million respectively. Among them, the Dayong Ancient City project is under construction, and the Zhang International Hotel and Yangjiajie Ropeway went from profit in the same period last year to loss. Environmental passenger transport business: The net profit of the environmentally friendly passenger transport business in the first half of the year was RMB 22.47 million, down 29.8% year on year. The number of ticket purchasers reached 1,455,500, a decrease of 9% over the previous year, mainly due to a decrease in passenger flow due to the construction of Wulingshan Avenue. Furthermore, due to the reduction in the ticket price of environmentally friendly passenger buses, the passenger unit price fell from 57 yuan in the same period last year to 52 yuan, which also affected revenue and profit. Ten Mile Gallery Sightseeing Bus: The Ten Mile Gallery sightseeing tram business achieved revenue of 208.207 million yuan in the first half of the year, a year-on-year decrease of 8.15%. The number of ticket purchasers was 522,900, an increase of 6.19% over the previous year. Gross margin was 62.36%, up 10.3% year over year, and revenue and profit grew steadily. Yangjiajie Ropeway: The number of people who purchased tickets for the Yangjiajie Ropeway was 217,300, a year-on-year decrease of 25.22%. Gross margin was -4.9%, down 33.5% year on year, and net profit loss was 4.39 million yuan. Mainly due to the impact of the construction of Wulingshan Avenue, tourist buses are prohibited on some sections of the road. As a result, the Yangjiajie Ropeway is isolated and closed compared to core scenic spots, and passenger flow has also declined markedly. Baofeng Lake Scenic Area: The number of ticket purchasers for Baofeng Lake Scenic Area in the first half of the year was 296,200, a decrease of 4.57% over the previous year. Net profit decreased 66.8% year over year to 6.23 million yuan. The ancient city of Dayong progressed steadily, traffic improved or increased passenger flow, and maintained a “prudent increase” rating. 18 The company's performance in the first half of the year continued to be under pressure. It was mainly affected by factors such as highway construction around the scenic area, government price adjustments, etc., and overall passenger traffic declined. The company's future growth will mainly come from the opening of the Dayong Ancient City project. After the completion of the project, it will fill the gap in cultural tourism products in Zhangjiajie scenic spots and the middle and high-end leisure vacation markets. The company's EPS for 18-20 is expected to be 0.10 yuan, 0.14 yuan, and 0.17 yuan respectively, corresponding to the current PE of 65, 49, and 40 times, maintaining the “prudent increase in holdings” rating. Risk warning: The progress and profit of the fund-raising project fell short of expectations, and the increase in tourist traffic to scenic spots due to disastrous weather and emergencies fell short of expectations.