The company's current valuation is very low and should have reflected all negative factors. The future of stock prices is likely to recover with potential catalysts, including strong Double Eleven sales or greater investor demand after incorporating the Shenzhen/Shanghai-Hong Kong Stock Connect. Since May 2018, Goodboy International's stock price has fallen by 41.6% in 4 months. We believe this should reflect all negative factors, including 1) more bad accounts receivable provisions related to the bankruptcy of Toys R Us (“TRU”), and 2) China's GB durable goods business, which is weaker than expected (after acquiring GB's retail business). Our projected net profit for fiscal year 18/19/20 is HK$357,000/HK$446,000/HK$550 million, which is approximately 18.2%/18.7%/16.9% lower than market expectations. The company's current valuation is 14.9 times the predicted price-earnings ratio for FY18, which is more than one standard deviation below its five-year average forecast price-earnings ratio of 16.7 times. In terms of book value, the predicted net market ratio for FY18, which is currently 0.96 times the valuation, is close to its historical low, and about two standard deviations below its five-year average forecast of 1.54 times the net market ratio. Martin Pos (Executive Director and CEO) purchased shares worth over HK$15.7 million at the beginning of September 2018 (prices ranged from HK$3.01 to HK$3.22), increasing his ownership of the company from 4.59% to 4.89%. Future stock price catalysts may be 1) strong e-commerce sales in the 2018 Double Eleven (brands and platforms have invested more effort after weak growth in 618 in 2018) or 2) recent increase in investor demand after incorporating the Shenzhen/Shanghai-Hong Kong Stock Exchange. We are now more cautious, cutting our financial forecasts and lowering our target prices, but maintaining our buying ratings. We lowered our earnings per share forecast for the 18/19/20 fiscal year by 34%/35%/30%, and lowered the target price from 19 times the predicted price-earnings ratio for FY18 by 30.9% to HK$4.27. Currently, it is based on 16 times the predicted price-earnings ratio for FY19 (the peer average is 16.4 times). Changes in senior management may explain China's durable sales and cost pressures in the first half of FY18. We think the weak results in the first half of the year may be due to recent changes in senior management. For example, GB's durable goods business is particularly weak (sales fell 6.7% year over year in the first half of FY18); previously, the head of GB's durable goods business actually left his job at the end of 2017. In addition, there are other changes. For example, the head of GB's Chinese market has only recently been promoted, and other executives such as Mr. Leung Yi-cheol, head of GB's retail business (with extensive knowledge of clothing products) and Mr. Xia Xinyue (from Faurecia Auto), the head of the global supply chain, only joined the group in November 2017, so we think they may all need a certain transition period before they can perform well. In the second half of FY18, we expect Cybex/GB Non-Durable growth to remain strong, while GB Durable/Evenflo/Tactical brands will improve. We forecast FY18 sales in the Cybex/ GB non-durable goods/GB durable goods/Evenflo/strategic brand business to reach 21.0% year-on-year increase/ 26.8% growth/ 2.9% down/ 0%/7% decline, while year-on-year growth in the first half of the year was 24.9% increase/ 27.7% growth/ 6.7% down/ 6.6% drop/ 11.1% decline, respectively. All in all, we forecast a 7.7%/10.9% yoy increase in sales/operating profit for the second half of FY18, while the first half of FY18 is 6.5% yoy/ down 19.3%. The outlook for the second half of FY18 is more optimistic, as pressure is more relaxed on many fronts, including 1) unfavorable foreign exchange, 2) the drag of TRU bankruptcy, and 3) other one-time costs. We expect operating profit margins to improve to 7.0% in the second half of FY18 (4.9% in the first half of FY18), benefiting from: 1) Foreign exchange and gross margin pressure will decline in the second half of the year, especially for blue-chip businesses. The exchange rate of RMB against the US dollar in the first half of '18 was very strong, putting a lot of pressure on its gross margin; 2) Since TRU officially went bankrupt in March 2018 and sales officially stopped, it is expected that there will be few bad debt provisions for TRU's accounts receivable in the second half of the year (the second half of FY17 and the first half of FY18, respectively, HK$2,70,000/3100 HK$10,000); 3) Compared with the past 12 months, there will also be fewer one-time costs in the second half of FY18, such as conversion fees for European logistics providers in the first half of FY18 (about HK$24 million), M&A transaction costs in the second half of FY18 (about HK$27.3 million) and excessive taxes due to US tax reform in the second half of FY18 (about HK$21.3 million)