On the evening of January 30, the company released its 2018 performance forecast. It is expected to achieve net profit of 23 million yuan to 27 million yuan during the reporting period. The impact of the brief review on non-recurring profit and loss is obvious. The company's management level has continuously improved the company's performance in recent years. Non-current profit and loss items have greatly changed, especially in 2017, which had a great impact on the company's net profit level. According to the 2017 annual report, the company's disposal subsidiaries received net profit of 42.6698 million yuan, bringing the total non-recurring profit and loss to 66.863 million yuan. In this reporting period, the asset disposal income of Zhang International Hotel decreased by RMB 22.2924 million compared to the same period last year. Only disposal subsidiaries brought about losses of RMB 13.33 million, resulting in non-recurring income during the reporting period far lower than in 2017. Considering that net profit after deduction in 2017 was only 500,000 yuan, as can be seen from the performance forecast, the profit level obtained by the company through operations is likely to improve in 2018, indicating that the company's internal management, cost reduction, and fee control measures have achieved corresponding results, and the management side's performance is improving. Ticketing policy adjustments and future policy support are expected to increase the company's net profit level after deducting non-return parents in the first three quarters. The main performance changes occurred in the Q4 quarter, mainly due to the reduction in tickets to Wulingyuan core scenic spots in response to national policies. Environmental passenger transport fares, which are the company's core business, are also among them. Considering that the current Zhangjiajie fare adjustment is quite appropriate, it is unlikely that another adjustment will be made in the short term. Combined with improvements at the company's own governance level, future impact is limited. At the same time, as the company's only listing platform in Zhangjiajie, the government's support for the company is relatively strong. The company's future transformation path is clear. The Dayong Ancient City project under construction is a key local construction project, and the government is expected to support the company's policy conditions from various aspects. Traffic in Zhangjiajie continues to improve, and the passenger flow situation is expected to improve in the future. Traffic in the Zhangjiajie Scenic Area will be greatly improved. 1) Wulingshan Avenue was completed and opened to traffic at the end of December. Previously, due to road construction, it was closed in 2018; 2) Yangjiajie Avenue will be opened to traffic before the Spring Festival, which will not only shorten the ride from Zhangjiajie City to Yangjiajie Scenic Area ticket stations, but also relieve traffic pressure and divert traffic during peak season; 3) The progress of railway construction will help increase passenger traffic in the scenic area. It is expected that the Zhangjiahui High Speed Rail, which will be put into use in 2021, will connect Zhangjiajie and Fenghuang. The district, in addition, connects the Yangtze River Delta Construction of the Jingzhang high-speed railway in the region and the Wulingshan district is also being actively promoted. The construction of many railways will greatly expand the radiation capacity of the Zhangjiajie scenic area, and passenger flow is expected to continue to grow. Investment advice: We believe that in the future, traffic conditions in the company's scenic spots will continue to improve, and the passenger flow side is expected to improve; at the same time, the company is the only local listing platform, which is expected to receive government support and ease the pressure brought about by the project. It is estimated that the EPS for 2018-2020 will be 0.07, 0.07, and 0.08 yuan, respectively, and the stock price corresponding to PE will be 76, 74, and 67 times, respectively, maintaining the “increase in holdings” rating. Risk warning: passenger flow in the ancient city of Dayong falls short of expectations; uncertainty caused by weather factors; geopolitical risks.