The 2018 1H results are in line with expectations, and Yinfei Storage announced 1H18 results: operating income of 352 million yuan, up 25% year on year; net profit belonging to the parent company was 57 million yuan, up 33% year on year, corresponding to profit of 0.19 yuan per share, net profit after deducting 48 million yuan, up 29% year on year, in line with 30% to 40% net profit growth rate in the pre-performance increase announcement. Among them, 2Q18 revenue increased 31%, gross profit increased 31%, and net profit to mother increased 44%, showing signs of growth acceleration compared to 1Q18. The warehousing robot system integration business grew rapidly, contributing about 43% of revenue and 54% of new 1H18 orders; the company's gross margin rebounded for two consecutive quarters, showing the strengthening of supply chain management and cost control capabilities. Development trends The warehousing robot system integration business is expected to achieve high endogenous growth: 1) According to the “China Logistics and Procurement Network” forecast, the smart warehousing market will exceed 95.4 billion yuan in 2020; 2) The company has established good cooperative relationships with JD, Yutong Bus, etc., and has rich customer resources. The acquisition of Nanjing Huade Storage will have a synergetic effect to enhance the overall bargaining power of listed companies with customers and suppliers: 1) On May 5, the company issued an announcement of 456 million yuan in transaction consideration (50% paid in shares and 50% in cash), and the price of non-publicly issued shares will be 11.07 yuan/share after price adjustment; 2) Huade Warehousing is a leading logistics equipment manufacturer in the industry. The revenue is about 60%, and the net profit is about 1/3 of Yinfei Storage, and has strong complementarity with Feyin Storage in terms of product structure and customer channels; 3) 2018 Huard Warehousing has strong complementarity with Feyin Storage; 3) 2018 Huard Warehousing The performance promises for /19/20 are 3800/4,500/49 million yuan respectively. According to our estimates, since the target company has good profitability, the company's immediate returns will not be diluted, and the profitability and resilience of Yinfei Storage will be improved. Strengthening supply chain management will help reduce the adverse effects of material price fluctuations: the company plans to establish a joint venture to establish Nanjing Yinhua Supply Chain Management Service Co., Ltd., to integrate upstream and downstream resources, and at the same time use futures solutions to hedge in the steel market and stabilize gross profit margins. Profit forecast We raised our 2018/19e profit forecast by 0%/14% to 1.07 billion yuan. The corresponding net profit growth rate to mother was 27.9%/19.0%, respectively, and net profit per share was 0.35/0.42 yuan, respectively. The valuation and proposed current share price correspond to 26.7/22.5 times 2018/19 P/E. Maintaining a neutral rating, the target price was lowered by 7.6% to 11 yuan due to a sharp reduction in the logistics sector's valuation center, corresponding to 31x 2018 P/E, and there is room for 17% increase. Risk of macroeconomic stalling, rising steel prices, and exchange rate fluctuations.