The report explains that the company released its 2018 annual report on March 12. In 2018, the company achieved operating income of 2,902 billion yuan, up 45.75% year on year, and net profit to mother of 81.61 million yuan, up 20.29% year on year. Key investment points The company's revenue continued to grow at a high rate, domestic and foreign business went hand in hand, and 2018 performance was in line with expectations, and order volume was steadily released. In 2018, the company achieved revenue of 2,902 billion yuan, a year-on-year increase of 45.75%. Among them, the company's main business, the steel structure business, achieved significant growth, achieving revenue of 1,613 billion yuan, an increase of 65.40% over the previous year. Another major business, heavy-duty steel wheels, achieved revenue of 1,070 billion yuan, an increase of 22.92% over the previous year. From a regional perspective, the domestic market increased sharply in 2018, with a year-on-year increase of 56%. The foreign business also expanded rapidly, with a year-on-year increase of 32.34%. The company's revenue side continued to improve. Net profit attributable to mother in 2018 was 81.61 million yuan, up 20.29% year on year. Due to rising material costs, gross margin decreased 2.18% year over year. Due to the impact of RMB depreciation, financial expenses were drastically reduced in 2018, reducing the pressure of rising costs and improving profitability. The steel structure business is based on high-end steel structure manufacturing. The company has a stable position in the industry and focuses on developing the steel structure business requiring high-end technology. The company NCC Xinchangcheng currently has an 80-person steel structure R&D and design team, especially outstanding experience and ability in steel structure nodes and detailed design. In overseas markets, the company continues to consolidate good cooperative relationships with international EPCs such as Fluor of the United States, Dechnib of France, Japan's JGC, Mitsubishi Hitachi, Italy, Technymont, US CB&I, Taiwan Zhongding, Sinopec SEG, and CNPC Global. Newly undertaken or continued overseas projects include the Fluor Philippines JGSUMMIT project, Flu Ma Oil RAPID project P29, JGC Algeria project, Zhongding Oman LIWA project, Sinopec Middle East ARUP project, China Power Investment Yuanda Indonesia BV seawater desulfurization project, etc.; market , newly undertook the Sinopec Hainan Refining and Chemical PX Project, the Zhongke Guangdong Refining and Chemical Integration Project, the BYD Zoucheng/Anyang Cloud Rail Project, CRRC Liuzhou Cloud Rail Project, Guangzhou Metro Parking Lot, Nanchong Gaoping Highway Overpass and the Guangzhou Foxconn 10.5 Generation Panel Project, Guangzhou Foxconn Glass Project, Xi'an Samsung Semiconductor Chip Project, Mianyang BOE 6th Generation Flexible Panel Project, Wuhan High-generation LCD Device Project, Fujian Three Gorges Wind Power Plant, Chongqing Great Wall Motor, Fujian Xinfuxing Glass, West Center Building, Global Center Building, Xiamen High-rise buildings and plant projects such as Software Park Phase III, Xiamen Yingqu Intelligent Manufacturing, Xiamen Donghai Torch Park, and Chengdu Guanghui Xueliantang Art Museum project. The subsidiary Xinchangcheng's production capacity continues to be released, improving the company's ability to undertake future business in the fields of high-rise buildings, heavy plants, large-scale public construction, rail transit, and power plant steel structures, and its position in the industry is stable. The Huaan wheel project is progressing well. Future production capacity will increase dramatically in 2018. The company's cash payments for fixed assets, intangible assets, and other long-term assets increased by 43.55% over the same period. The main reason is that the company increased its investment in the Huaan project and the establishment of a new rishang forging company. The company plans to invest RMB 1 billion to build a project with an annual output of 1.5 million aluminum alloy wheels. The first phase of the project will invest 250 million yuan. After the project is put into operation, it will have a production capacity of 250,000 forged aluminum alloy wheels per year. At present, the project has completed the first phase of the main production plant construction, equipment installation and commissioning, and trial production. As automotive wheel materials develop in the direction of weight reduction, resource saving, high performance and high functionality, the market prospects for new investment projects are broad. Profit forecast and valuation We expect the company to achieve revenue of 36.14, 42.67, and 5,061 billion yuan in 2019-2021, with year-on-year increases of 24.52%, 18.07%, and 18.61%, and net profit attributable to the parent company of 1.108, 1.354, and 170.6 million yuan, with year-on-year increases of 35.80%, 22.13% and 26.01%; EPS in 2019-2021 is 0.16, 0.19, and 0.24 yuan, respectively. The PE corresponding to the latest stock price is 25.3, 20.72, 16.4 times This is because the company's steel structure is developing well in the domestic market. We are optimistic about the company's development and maintain a “buy” rating. Risk warning: Prices of raw materials have risen sharply; trade frictions affect overseas customer orders;