The 2018 results are consistent with the forecast, Galaxy Magnet announced the 2018 results: operating income of 600 million yuan, an increase of 13.7% over the previous year, and net profit attributable to the parent company of 156 million yuan, a decrease of 19% from the previous year, corresponding to a profit of 0.48 yuan per share, which is in line with the performance forecast range. Among non-recurring profits and losses, the company's old factories generated asset disposal income of 62.78 million yuan in 2017 due to government collection and storage, which is one of the main reasons for the difference in the company's performance compared to the previous year in 2018. In 2018, the company deducted a net profit of 156 million yuan, +14% over the same period last year. In 2018, the company plans to pay 0.35 yuan per share (tax included). 4Q18 Galaxy Magnet's revenue was 140 million yuan, down 9.6% year on year, down 13.1% month on month, net profit was 32.72 million yuan, down 27% year on year and 27% month on month, mainly due to 4Q18 company's gross profit of 48.59 million yuan, down 21% year on year, down 15.5% year on month, gross margin decreased 5.1 ppt year on year and 1.0 ppt month on month. Comment: 1) Production and sales increased year over year. In 2018, the company's production of rare earth permanent magnets was 1,940 tons, up 8.4% year on year, and sales volume was 1,926 tons, up 12% year on year. 2) The consolidated gross margin in 2018 was 35.8%, a year-on-year decrease of 3.7ppt. 3) Financial expenses decreased by 18.9 million yuan year-on-year in 2018, mainly due to the year-on-year increase in exchange earnings and interest income, and the financial expenses rate decreased by 3.3ppt to -2.1%. 4) Cash flow from operating activities in 2018 was 120 million yuan, an increase of 70% over the previous year. The development trend is that the profit margin of magnetic materials is still under pressure, and the price of light rare earths is stable. In January-January this year, the national production and sales volume of new energy vehicles was 150,000 units/148,000 units, +84%/+99% over the same period last year. In the period of adjustment of NEV subsidies, the profit of the NdFeB magnet sector is still facing challenges. On the upstream side, Myanmar's import restrictions have limited potential impact on light rare earths. Domestic crackdown on illegal mining is still a supply deterrent, but demand is also unlikely to improve significantly, and prices will remain relatively stable. First quarter performance forecast: The company expects 1Q19 sales revenue to be the same year on year, and net profit of the mother to be 3210-35.65 million yuan, down 0-10% year on year. Profit forecasts We maintain our 2019/20 profit forecasts of $0.44 and $0.44 unchanged. The valuation and recommendation is that the company's current stock price corresponds to 29.4/29.9 times P/E in 19/20, maintaining a neutral rating and target price of 12.0 yuan, corresponding to 27.0/27.5 times P/E and an 8% decline in 19/20. The production of risky new energy vehicles fell short of expectations. The price of rare earths has fallen sharply.