Project progress affected performance and cash flow. Newly signed orders increased significantly. The company's 18H1 achieved revenue of 1,043 million yuan, YoY -9.71%; realized net profit of 97 million yuan, YoY -6.66%; net profit after deduction of 91 million yuan, YoY -2.73%, in line with the lower limit of the company's pre-increase range (-10%, 20%), but was slightly lower than market expectations. The company's net cash outflow from operating activities in the first half of the year was 414 million yuan, an increase of 299 million yuan over the same period last year. Large-scale projects are still in the implementation stage, and no cash inflows have been generated. The company's cumulative order volume for 18H1 contracts (including winning bids to be signed) increased by 83% year-on-year. Due to the slowdown in the company's order confirmation pace and share repurchases to reduce the total share capital, we lowered the company's 2018-20 EPS to 0.19/0.26/0.32 yuan, maintaining the company's “buy” rating. Quarterly operations improved month-on-month, and smart transportation rebounded sharply in 18Q1/Q2. The company achieved revenue of 378/665 million yuan, YoY -15.93%/-5.74%, respectively; achieved net profit of 0.36/061 million yuan, YoY -11.20%/-3.76%, and Q2 business conditions improved month-on-month in Q1. The revenue of 18H1 building energy efficiency and smart medical care is YoY -10.43%/-27.55%. We believe that it is mainly affected by the order construction cycle. Smart medical orders have increased 98%, and future revenue growth is expected to accelerate. After experiencing a downturn last year for smart transportation, 18H1 revenue increased 88% year on year, and it was announced in the first half of the year that it won the bid for the two Chengdu Metro lines totaling 247 million yuan. The sharp upward trend is expected to continue. Overall profitability increased, and the sales expenses ratio increased rapidly. The comprehensive gross margin of 18H1 company was 31.41%, up 4.74pct over the same period last year. Among them, gross margins of construction, transportation and medical businesses increased by 4.52pct, 15.27pct, and 3.38pct respectively. Net profit margin was 9.66%, up 0.45pct from the same period last year. The cost ratio for the period was 18.53%, an increase of 3.43 pct over the same period last year. Mainly, the sales expense ratio increased by 2.41 pct to 9.67%, and the management fee ratio and financial expense ratio increased slightly by 0.68 pct and 0.36 pct. The decline in revenue ratio affected operating cash. Dashi Building and PPP increased investment outflows from the company's 18H1 net operating cash outflow of 414 million yuan, an increase of 299 million yuan over the same period last year. Mainly, major projects are still in the implementation stage, resulting in revenue falling to 73.23% from 79.89% in the same period last year. There was a net outflow of investment cash of $272 million, compared to a net inflow of $07 million for the same period last year, mainly due to increased investment cash outflows from smart healthcare PPP projects such as Dashi Tower and Huainan and Hongze Lake. By the end of June 2018, 80% of the Dash Tower renovation and expansion project had been completed and is expected to be delivered by the end of 2018. Affected by the increase in long-term and short-term loans, the company's balance ratio at the end of June '18 was 46.99%, a significant increase of 7.02pct over the same period last year. The 2018 performance forecast and valuation were lowered to maintain the “buy” rating 18H1. Due to large changes in the macroeconomic environment, the progress of the company's smart medical and engineering orders has slowed down, and the average PE of comparable companies in 2018 has dropped 28 times. We lowered the company's net profit for 2018-20 to $3.62/491/613 million yuan, down 20%/15%/17% from the original forecast of $4.5/5.8/740 million, respectively. Furthermore, the company's repurchase and cancellation of 121 million restricted shares during the reporting period led to a decrease in total share capital. The corresponding adjusted EPS was 0.19/0.26/0.32 yuan (the original forecast was 0.23/0.30/0.38 yuan). Due to the reduction in performance growth rate and the decline in comparable valuations, the company's PE in '18 was adjusted 25-30 times accordingly, corresponding to the reasonable price range of 4.75-5.70 yuan, maintaining the “buy” rating. Risk warning: Smart medical/hospital projects are progressing slowly, building energy efficiency business is not being implemented as expected, etc.