Performance growth is steady. The undervalued company with low debt ratio, 18H1 achieved revenue of 1,380 billion yuan, YoY +20.02%; achieved net profit of 130 million yuan, YoY +25.48%, slightly above the lower limit of the company's pre-increase range (+25%, +65%), and is expected to increase performance by 10-50% from January to September this year. 18H1 had a net operating cash outflow of $128 million, an increase of $57 million over the same period last year. The company's balance ratio at the end of June was only 34.76%, and the current price is only 9.39 times PE in 2018. We maintain the company's 2018-20 revenue and performance forecast. The corresponding EPS is 0.76/1.12/1.53 yuan, maintaining the “buy” rating. Q2 The growth rate of revenue performance slowed month-on-month, and profitability increased slightly. The company's 18Q1/Q2 achieved revenue of 414/966 million yuan, YoY +43%/+12% respectively; achieved net profit of 0.16/114 million yuan, and YoY +49%/+23%. We think it is mainly related to PPP clearance and project stoppage in some regions. The company's 18H1 consolidated gross margin was 18.73%, a slight increase of 0.19pct over the same period last year; net profit margin was 9.41%, up 0.41pct year-on-year. The period fee rate increased slightly by 0.7 pct to 7%, mainly because the financial expenses rate increased by 1.12 pct to 1.98% year on year. As amortization of equity incentive costs decreased by 6.14 million yuan year over year, the 18H1 management fee rate decreased by 0.31 pct to 5.03% year over year. The net outflow of operating investment has increased, and allotment of shares has reduced debt to open up room for business growth. As the number of large and medium-sized municipal engineering projects undertaken by the company has increased, the company's 17H1 municipal garden revenue has already accounted for more than half, reaching 57.7%. Installment payments for EPC projects and PPP capital investment have all increased the company's capital requirements. 18H1 had a net operating cash outflow of 128 million yuan, an increase of 57 million yuan over the previous year; net investment cash outflow was 110 million yuan, an increase of 2.13 million yuan over the previous year. The company's monetary capital at the end of June 2018 was 930 million yuan, and the balance ratio was 34.76%, down 14.01 pct from the same period last year, far below the debt ratio level of 64.46% in the SW garden sector in the same period. This opens up space for the company to expand EPC/PPP projects and traditional municipal projects in the future. There are plenty of orders in hand, and the repurchase plan of up to 100 million yuan shows confidence in development. 18H1 has signed a total of 3.140 billion yuan in new orders, and the cumulative number of unfinished orders signed at the end of June was 5.968 billion yuan, 2.33 times the revenue for the full year of last year. The company's low debt ratio and financial advantages are expected to accelerate project implementation. The company announced a competitive repurchase plan in early August this year. It believes that the current stock price of the company is affected by external market factors and does not correctly reflect the value of the company. It plans to use its own capital to buy back 50 million to 100 million yuan of the company's shares. The repurchase price will not exceed 10 yuan/share, demonstrating confidence in the company's future development. We are optimistic about the company's low debt and undervaluation advantages, and maintain the “buy” rating company with 18H1 revenue of 1.38 billion yuan and net profit of 130 million yuan, completing 34.5% and 35.3% of the annual financial budget, respectively. Combining the company's current orders and low debt ratio, we maintain the company's 2018-20 performance forecast. The EPS corresponding to the distribution of equity in '17 (10 transfers of 6 to 1 yuan) is 0.76, 1.12, and 1.53 yuan. Due to financial deleveraging suppressing the valuation of the garden sector, the current average PE value and median value of comparable garden companies in 2018 is 13.46 and 14.22 times, slightly lowering the company's PE in 2018 to 12-14 times (previously 16-19 times), corresponding to the price range of 9.12-10.64 yuan, maintaining the “buy” rating. Risk warning: slow implementation of PPP projects, investment risks in new fields of ecological and cultural tourism, etc.