Report guide The company released its 2018 three-quarter report on October 24. In the first three quarters of 2018, the company achieved operating income of 2,222 billion yuan, an increase of 63.70% over the previous year, and net profit of 61.53 million yuan, a year-on-year increase of 38.63%. Key investment points The company's orders continued to increase, and operating income continued to grow at a high level. The company's revenue increased steadily in the third quarter of 2018, and the order volume continued to rise. In the first three quarters of 2018, the company achieved revenue of 2,222 billion yuan, up 63.70% year on year. From a regional perspective, the domestic market has increased dramatically, and the number of steel wheel business orders in the foreign market is sufficient, and it continues to maintain a rapid growth trend. Although the Sino-US trade war has brought uncertainty to the company's development, the company has actively adjusted its overseas strategy to increase production capacity in Vietnamese factories, and the company's revenue side continues to improve. Net profit for the first three quarters of 2018 was 61.53 million yuan, up 38.63% year on year. Due to the depreciation of the RMB, financial expenses in the third quarter were drastically reduced, and profitability increased. The steel structure business is based on high-end steel structure manufacturing, and the industry position is stable. The company focuses on developing the steel structure business with high-end technical requirements. The company NCC Xinchangcheng currently has a steel structure R&D and design team of 80 people, especially in steel structure nodes and detailed design, with outstanding experience and ability in steel structure nodes and detailed design. In overseas markets, the company continues to consolidate good cooperative relationships with international EPCs such as American Fuzhou, France's Deshinib, Japan's Mitsubishi Hitachi, Italy's Technemont, US CB&I, Taiwan Zhongding, Sinopec SEG, and CNPC Global; in the domestic market, the company has outstanding performance in large-scale electronics industry plants, new energy vehicles, rail transit and large-scale public construction, and completed the Nanning International Convention and Exhibition Center, Chongqing Banan Stadium project, and Guangzhou Foxconn panel project BC package large-scale steel structure projects. The company also undertook projects such as Guangzhou Fuji in the first half of the year. Kang's Corning Glass project steel structure project, Xi'an Samsung Electronics project steel structure project, BYD Zoucheng, Anyang cloud rail project, CRRC Liuzhou cloud rail project, Xi'an Global Center, Chongqing Global Center, Xiamen Software Park Phase III, etc. In the future, with the continuous expansion of the domestic equipment steel structure market, the company is expected to continue to gain strength with its technological advantages. Investment in the current phase increased dramatically. The Huaan Wheel Project progressed in an orderly manner in the first three quarters of 2018. The company's cash payments for fixed assets, intangible assets and other long-term assets increased by 37.14% over the same period, mainly because the company increased its investment in Huaan projects and the establishment of a new Japanese forging company. According to industry forecasts, the average growth rate of domestic aluminum alloy wheels will reach 50-80% in the next 3-5 years. Domestic buses and special dangerous goods vehicles are now equipped with a large number of forged aluminum wheels. As automotive wheel materials move in the direction of weight reduction, resource saving, high performance and high functionality, the market prospects for new investment projects are broad. Profit forecast and valuation We expect the company to achieve revenue of 26.80, 31.80, and 3.734 billion yuan in 2018-2020, a year-on-year increase of 34.63%, 18.64%, and 17.42%, and achieve net profit attributable to the parent company of 0.883, 1.067 and 133.3 million yuan, up 30.20%, 20.78% and 24.96% year on year; the EPS for 2018-2020 is 0.13, 0.15, and 0.19 yuan respectively, corresponding to the latest stock price of PE of 22.9, 18.9, 15.2 times The company's steel structure is developing well in the domestic market. We are optimistic about the company's development and maintain a “buy” rating. Risk warning: raw material prices have risen sharply; trade friction affects orders from overseas customers;