Connie M&E announced the 2018 performance forecast. Connie Mechatronics announced the 2018 performance forecast. It is estimated that the net profit of the mother in 2018 will be a loss of 2.7-3.2 billion yuan, which is lower than our expectations, mainly due to large-scale goodwill impairment and litigation guarantee losses against the subsidiary Longxin Technology. Focus on the main points, the subsidiary Longxin Technology's extracorporeal risks caused the company to experience huge losses in 2018. As the majority shareholders of Longxin Technology, a merger and acquisition subsidiary, violated guarantees, Longxin Technology's capital turnover was difficult and operations were under pressure. (1) The company calculated large losses of 500 to 900 million yuan on matters such as guarantees in the Longxin Technology lawsuit. (2) The normal production and operation of Longxin Technology has been seriously affected, and the business has shrunk sharply. The company expects that Longxin Technology will experience huge losses in 2018. Therefore, the company expects to accrue significant goodwill impairment of 2 to 2,271 billion yuan. The risks of Long Xin's technology have basically been released. On June 26, 2018, the company first disclosed the risk of Longxin Technology caused by the majority shareholder of Longxin Technology's illegal guarantee. After half a year of urgent processing and this full credit impairment and litigation guarantee plan, we believe that the company's risks have basically been eliminated, and the main rail transit business will be regrouped in the future. In 2019, the company will focus on the development of its main business. We expect that Connie Mechatronics will gradually downplay Longxin Technology's electronics business and refocus on the main rail transit equipment business. According to our estimates, China Railway and urban rail will both experience a peak in traffic opening in 2019-20. We expect railway completion mileage to reach 8,344 km/9,096 kilometers in 2019/20, an increase of 78%/9%, respectively; in 2019/20, the country added a total of 999/1,393 kilometers of subway lines, an increase of 1%/39% over the previous year. The company's door system business will directly benefit from the increase in equipment procurement brought about by the peak traffic opening. The valuation and recommendations take into account the impairment of the company's goodwill, and Longxin Technology's ability to operate sustainably is questionable. We have further lowered the company's 2018e profit forecast from -0.23 yuan to -2.96 yuan, lowered the 2019e profit forecast by 52% to 0.29 yuan, and introduced the 2020e profit forecast of 0.35 yuan. The company's current stock price corresponding to the 2019/20 P/E is 13.5x/11.3x, respectively. Maintaining a neutral rating and considering the lower profit forecast, we lowered our target price by 24% from 5.40 yuan to 4.10 yuan. The corresponding 2019 P/E is 14x, and there is 5% room for the current stock price to rise. The growth of the risk-tracking business fell short of expectations.