The company's 2018 revenue increased 2.81% year on year, and net profit to mother increased 5.32% year on year. On the evening of April 3, the company announced its 2018 annual report. In 2018, it achieved operating income of 10.682 billion yuan, up 2.81% year on year, and realized net profit to mother of 224 million yuan, equivalent to fully diluted EPS of 0.29 yuan, an increase of 5.32% year on year, achieving net profit deducted from non-return mother of 209 million yuan, an increase of 9.18% year on year. The performance exceeded expectations, mainly due to the fact that 4Q2018 revenue increased 9.12% year on year, while 3Q2018 revenue decreased 4.85% year on year. 4Q2018 achieved net profit of 53 million yuan to mother, while net profit of 4Q2017 was -40 billion yuan. Gross margin decreased by 0.68 percentage points in 2018, and the cost ratio increased by 0.54 percentage points. The company's comprehensive gross margin in 2018 was 19.49%, down 0.68 percentage points from the previous year, and the comprehensive gross margin of 4Q2018 companies increased 2.21 percentage points over the same period last year. The company's expense ratio for the 2018 period was 14.03%, up 0.54 percentage points from the previous year. Among them, the management expense ratio increased 0.56 percentage points over the same period last year. The 4Q2018 company's expense ratio decreased by 0.02 percentage points compared to the same period of the previous year, and the management fee ratio increased 0.77 percentage points over the same period of the previous year. A leading retail enterprise in Anhui, the chain network continues to expand. In 2018, the company added 30 new chain outlets and an additional business area of 195,000 square meters. In terms of department store business, Tongling Beidou Store, Binhu Xinyue City, and Baiyan Ole Life Plaza opened one after another. In terms of supermarket business, Hejiafu opened 23 new outlets throughout the year, adding 67,000 square meters of operating area. By the end of 2018, the company had 233 physical stores in its three business categories, department stores, home appliances, and supermarkets, which occupied favorable positions in the core business districts and sub-business districts of many cities in Anhui Province. As a leading retail enterprise in the Anhui regional market, the company has initially established a chain network based in the provincial capital and covering the whole province. The profit forecast was raised to maintain the company's stable position as a leading regional retail enterprise, with a rich business format, and the 2018Q4 performance was higher than expected. We raised the company's EPS forecast for 2019-2020 to 0.30/ 0.32 yuan (previously 0.23/ 0.22 yuan), respectively, and added a forecast for the company's 2021 EPS of 0.34 yuan. Currently, the company's PE (2019E) is 19X, which is significantly lower than the three-year average of 24X, and PB (2019E) is 1.1X, which is significantly lower than the three-year average of 1.7X, maintaining an “gain” rating. Risk warning: The business area is concentrated, and the length of the cultivation period for new stores exceeds expectations.