The 2018 performance forecast was slightly lower than the expected company performance forecast: 2018 revenue of 3.25 billion yuan, up 5.8% year on year; net profit attributable to the parent company was 150 million yuan, down 12.2% year on year. Corresponding to 4Q18 revenue of 980 million yuan, up 6.4% year on year; net profit attributable to parent company was 37 million yuan, down 37.1% year on year. Key points of focus The main reasons why the company's revenue increased but profits declined in 2018:1) The company increased R&D investment to develop the intelligent manufacturing business, leading to an increase in R&D expenses. 2) The robotics business and reinsurance business invested by the company continued to lose money, which dragged down the company's profits later. 3) Under the influence of the above, the company's operating profit margin decreased by 1.2ppt to 4.7% year-on-year in 2018. On a quarterly basis, the devaluation of RMB 2H18 helped restore the profitability of the export business, but the operating profit margins of 1Q/2Q/3Q/4Q18 companies were 5.8%/7.4%/1.3%/4.4%, respectively, and new business losses had a significant negative impact. We expect 4Q18 to improve the company's online sales and export business: 1) The company's Double Eleven and Double 12 promotions have had obvious results. According to Taobao data, in November and December 2018, the ratio of Aishida's Tmall flagship store sales compared to the sales volume of Supor's Tmall flagship store increased from about 20% to 52% and 35%. 2) The average sales price of Aishida cookware is less than 200 yuan. The lipstick effect has led to a greater increase in the growth rate of categories essential for daily life and low unit prices. 3) The 4Q18 RMB exchange rate is relatively stable. We expect the gross margin and profitability of the company's exports to gradually stabilize. 4) The price of aluminum 4Q18, the main raw material, was reduced by 5% to 10% year-on-year, which is conducive to improving the company's profit margin. Currently, there is still a certain gap between Aishida's cookware business and Supor. In terms of frying pan products, Supor uses Red Dot technology supported by the parent company. The average retail price of pans in the Tmall flagship store can reach 152 yuan, while the average retail price of Aishida pans is only 84 yuan. The company's product competitiveness and brand recognition need to be improved. Valuation and recommendations The company's performance forecast was lower than expected, and the 2018/19/20 EPS forecast was lowered by 9%/9% to 0.43 yuan/0.50 yuan/0.57 yuan. Maintaining a neutral rating, the target price is $10.00, corresponding to 23/20x 2018/19e P/E. The company's current stock price corresponds to 22/19x 2018/19e P/E, and the target price is 7% within the current share price increase. Risk The risk of RMB exchange rate fluctuations.