Guide to this report: The company's 2018 performance was in line with expectations. The company's performance grew steadily, and profitability further increased. Demand for the company's downstream manufacturing industry is good. If the company completes the merger and acquisition of Suzhou Qingfeng, the company will become a dual main business company of Special Steel and IDC. Investment Essentials: Maintaining an “Overweight” rating. The company achieved operating income of 14.712 billion yuan in 2018, up 18.51% year on year; net profit to mother was 1,177 billion yuan, up 67% year on year, and the company's performance was in line with expectations. The company's quarterly revenue for the fourth quarter was 3.693 billion yuan, up 4.91% year on year; net profit from the fourth quarter to mother was 184 million yuan, down 45.19% year on year. Considering the correction in special steel prices, the company's business still has room to grow. The company's EPS for 2019/2020 was reduced by 0.57/0.59 yuan (originally 0.59/0.65 yuan), and the 2021 EPS forecast was added to 0.61 yuan. Referring to similar companies, the company was given a PE valuation of 22 times that of 2019, raised the company's target price to 12.54 yuan (originally 10.83 yuan), and maintained the “gain” rating. Production continues to reach new highs, and profitability continues to increase. In 2018, the company's gross profit and net profit per ton of steel were 1,021 and 365 yuan/ton respectively, up 296 yuan/ton and 138 yuan/ton respectively from 2017. The company's ROE level in 2018 reached 26.39%, up 3.38 percentage points from 2017, reaching historic highs. The company's steel production in 2018 was 3.229 million tons, up 52,000 tons from 2017, a record high. We expect good demand in the manufacturing industry in 2019, and the company's production and sales volume will remain high. Financial expenses remained low, and cash flow continued to improve. The company's debt ratio is low. Currently, interest income covers interest expenses, and financial expenses remain low. The company's cash flow continued to improve. Net operating cash flow increased by 760 million yuan to 2.56 billion yuan, and the company's cash flow continued to improve. The company is a leading special steel enterprise in China. If the company successfully merges and acquires Suzhou Qingfeng, the company will become the main business of Special Steel and IDC. Global Switch, a subsidiary of Suzhou Qingfeng, is a leading IDC owner and operator in Eurasia. It has 11 data centers distributed in London, Paris and other cities. The operating scale of Global Switch data centers is expected to increase by 41.69% from the current level between 2018 and 2020, and the company's performance is expected to continue to unleash. Risk warning: The acquisition progress fell short of expectations; the macroeconomic downturn accelerated.