Performance fell short of expectations; slower throughput growth and lower port charges put pressure on profitability in the short term, and Tianjin Port released its 2018 annual performance report. In 2018, the company achieved operating income of 13.06 billion yuan, a year-on-year decrease of 8%; net profit of 600 million yuan, a decrease of 27% over the previous year; and net profit of 520 million yuan after deducting non-return net profit of 520 million yuan, a decrease of 38% over the previous year. The company's performance fell short of expectations, and the decline in profit was mainly due to a reduction in dry bulk throughput and a reduction in port fees. Based on continued macroeconomic uncertainty and the port sector facing the risk of further fee cuts, the gross margin of the company's port business may decline further. As a result, we lowered our 2019E/2020E profit forecast for the company by 27%/22% to 64/70 million yuan, respectively. We switched the PE valuation from 2018 EPS to 2019 EPS. Based on 25.9x-27.1x 2019E PE, we raised the target price to 9.8-10.3 yuan to maintain the “increase in holdings” rating. The company's dry bulk throughput declined in 2018, and container throughput increased steadily. The sharp decline in the company's profit in 2018 was mainly due to the reduction in dry bulk throughput and the reduction in handling charges. In 2018, the company's handling business achieved revenue of 5.8 billion yuan, a year-on-year decrease of 4%; gross profit margin of 31%, a year-on-year decrease of 5 percentage points; a total completed cargo throughput of 430 million tons, an increase of 10% year-on-year, of which bulk goods throughput was 260 million tons, a year-on-year decrease of 5%; and container throughput of 15.97 million TEUs, a year-on-year increase of 39%. In 2018, the rest of the company's business segments experienced a decline in profit. Among them, the gross profit of sales business, port logistics business, and port service business decreased by 18%, 24%, and 18%, respectively. We believe that with the steady development of the company's container business, the gross profit of the company's various divisions is expected to improve in 2019. Long-term development is worth looking forward to: production capacity upgrades and benefits from the construction of Xiong'an New Area. According to Clarksons data, in the 2018 ranking of the world's top ten container ports, Tianjin Port surpassed Dubai Port, ranking 9th, up 1 place from 2017. The company is blessed with its geographical location, benefiting from the construction needs of Xiong'an New Area. The company is located in the center of the Bohai Rim, with an internal radiation hinterland area of nearly 5 million square kilometers. Tianjin Port is the closest port to the sea in Xiong'an New Area, directly benefiting from the progress of Xiong'an's construction schedule. Furthermore, the company is actively developing production capacity. In 2018, the company opened two new foreign trade routes to South Africa and Japan, and launched “Tianjin-Moscow” and “Anyang-Tianjin Port” trains to accelerate the development of sea-rail intermodal transport. The latest target price range is 9.8-10.3 yuan. Maintaining the “increased holdings” rating is based on the current macroeconomic situation and the results of negotiations between China and the US. At the same time, the port sector may face the risk of further fee cuts. We believe that the gross margin of the core port business will decline further. We lowered the company's 2019E/2020E profit by 27%/22% to 64/70 million yuan, respectively. We switched the PE valuation from 2018 EPS (0.36 yuan) to 2019 EPS (0.38 yuan). Based on 25.9x-27.1x2019E EPS (the three-year average of the company's history, 17.4x PB+2.5 standard deviations), we gave a target price range of 9.8-10.3 yuan. Maintain the “Overweight” rating. Risk warning: natural disasters, worsening trade between China and the US, global economic crisis, and construction of Xiong'an New Area falling short of expectations.