Incident summary The company released a performance report. The company achieved revenue/performance of 13.218 billion yuan in 2018, a decrease of 13%/19%, which is slightly lower than the center of the growth rate of the parent's performance in the previous performance forecast (-12.5%). Operating analysis was hampered by revenue, and performance fell slightly below expectations. Profitability picked up slightly, and debt ratio declined slightly. 1) The company achieved revenue/performance of 13.218 billion yuan in 2018, a decrease of 13%/19%, which is slightly lower than the center of the growth rate of the parent's performance in the previous performance forecast (-12.5%). Among them, Q4 revenue/performance was 35.800 million yuan respectively, a decrease of 46%/40%. 2) Judging from the net interest rate, the company's net interest rate in 2018 was 13.4%, down 0.9 pct year on year. Q4 quarterly net interest rate was 22.4%, up 2.5 pct year on year, and profitability picked up. 3) Judging from the debt ratio, the company's debt ratio in 2018 was about 69.5%, an increase of 1.7 pct over the same period last year, but a decrease of 1.3 pct from Q3. Funding has improved, and short-term debt pressure has been lifted. 1) After the company's financing suffered a setback in May, the company's stock price continued to decline. Currently, PE (TTM) is less than 10 times, and the PB valuation is only 1.75 times. Both are at the lowest level of historical valuations. The market is most concerned about the company's financing and debt repayment issues. We believe that the company's current financing has eased, short-term repayment pressure has been lifted, and valuation is expected to be repaired to a certain extent. 2) Judging from the financing situation, since the fourth quarter of last year, a large number of policies focusing on bailouts for private enterprises have been introduced. According to our statistics, the company has raised 5.2 billion yuan since September (including 1 billion yuan of capital from agricultural bank investment bonds in November, loans from major shareholders in December, 520 million yuan in corporate bonds issued in January, and 780 million yuan in corporate bonds issued in February). The financing plans issued at the same time are about 11.8 billion yuan (including proposed issuance of 500 million US dollars of foreign bonds, 1.5 billion debt financing plans, 3 billion non-public corporate bonds, etc.), 9 billion yuan Since then, 5 billion yuan has been repaid, and in October, the company signed a bank-enterprise cooperation agreement with Huaxia Bank and received 2.4 billion yuan of intentional financing services. The financing has improved. 3) Judging from financing costs, the issuance interest rate for the first phase of ultra-short term finance in 2019 announced by the company on January 18 is 6.5%, which is significantly lower than the issuance interest rate for the second and third ultra-short term loans in 2018 (7.7%/7.76%). Financing costs have been reduced. With the implementation of more policies to encourage private enterprise financing, future financing costs are expected to decline further. 4) Judging from the repayment pressure, on February 18, the company paid the second instalment of the 2018 ultra-short-term financing notes on schedule, and the debt-free bonds for the next six months, and the short-term debt pressure was lifted. Profit forecasting and investment recommendations. Considering the year-on-year decline in the company's performance in 2018 and the continued high financing pressure, the company's profit forecast was lowered. The company's 2019/2020 EPS is expected to be 0.76/0.9 yuan, maintaining the “buy” rating. Risk warning: Bad accounts receivable, PPP implementation falls short of expectations, hazardous waste production and profit falls short of expectations, financing repairs fall short of expectations, and risk of lifting the ban on restricted shares (in December, the company lifted the ban on 2.55 million shares, accounting for 0.09% of the total share capital).