This report is read as follows:

Financing improvement will promote infrastructure to continue the upward trend. As the leader of private infrastructure design in Henan Province, the company will benefit from the stabilization and recovery of infrastructure and the upsurge of highway / municipal construction in the province, and is optimistic that the future performance will continue the high growth trend.

Main points of investment:

Maintain and increase holdings. The company released its 2018 performance KuaiBao, with revenue of about 1.14 billion yuan (+ 22%) and net profit of about 300 million yuan (+ 31%) slightly lower than expected. We speculate that the land policy / credit crunch has been dragged down, and the forecast for the company's annual EPS in 2018-19-20 has been lowered to 2.21pm 3.02pm 3.92 yuan (formerly 2.23mm 3.21pm 4.09yuan), with a growth rate of 31Canada / 37max. Maintain the target price of 49.6 yuan and increase the holdings by 13 times of PE in 2019 and 20 years.

Financing improvement overlay policy support strongly helps infrastructure to continue the upward trend, and infrastructure design benefits first. 1) January social finance data + local debt "open the front door", financing improvement overlay policy to support infrastructure is strong and catalytic-intensive, which will promote infrastructure growth to continue the upward trend, infrastructure design will benefit first; 2) the National standing Committee will make sure that private enterprises are not in arrears, credit has been marginal improved, and previous industry constraints such as land policy have been eliminated, we believe that corporate payback and cash flow will improve.

Henan has higher capital construction space and stronger finance. 1) the comprehensive density of provincial expressways is about 0.041km (10,000 km ~ 2) domestic 23rd / 13th five-year Plan requires that expressways be opened to traffic 7800km is only about 6600km (from 5016 to 6305km during the 12th five-year Plan), and the density of provincial roads and bridges is larger than that of first-tier provinces and cities, and there are many catalysis such as quality improvement of 100 cities / Central Plains Urban agglomeration / Zhengzhou National Central City. 3) the total provincial GDP ranks fifth in the 2018GDP growth rate for many years, which is 7.6% higher than the national 6.6% + general public budget revenue growth rate of 10.5% higher than the national 6.2%. The ratio of local debt to GDP12.5% 29 + debt ratio in 2017 is 163% 23. 4) in the central 2019 transfer payment, it won the second place in 118.4 billion and the first balanced payment of 97.3 billion yuan.

The company will continue the high growth trend for Henan capital construction design leader. 1) excellent fundamentals: strong profit (gross / net interest rate 48x28%) / low debt ratio 35% / capital on hand 74% higher than revenue; 2) qualification / technology / cohesion / per capita net creation to support the infrastructure boom in the province; 3) acquisition of provincial coal institute to enhance underground rail traffic and other strength and all target 2019 and thickened performance (2019-20 commitment to deduct non-net profit ≥ 0.32 billion) 4) the company strengthens the localized layout (setting up 6 regional operation centers outside the province), and the business outside the province may be raised to more than 40% in the future, and benefit from Xiongan construction.

Core risks: infrastructure growth is lower than expected, non-provincial and overseas market expansion is not as expected, etc.