Incident: The company released its 2018 annual report. It achieved annual revenue of 15.65 billion yuan, a year-on-year increase of 30.1%, gross profit margin of 13.3%, a year-on-year decrease of 0.4 percentage points. Net profit attributable to the parent company was 573 million yuan, up 37.1% year on year, and net profit per share was 0.276 yuan, up 35.0% year on year. In the fourth quarter, the company achieved operating income of 4.43 billion yuan, up 18.7% year on year, and net profit attributable to shareholders of listed companies of 205 million yuan, up 69.6% year on year. The 2018 profit distribution plan is to distribute a cash dividend of 1.37 yuan (tax included) for every 10 shares, no bonus shares, and no capital increase from the capital reserve. In 2018, the company's general engineering contracting business contributed to a significant increase in overall revenue: the company's sales revenue for the full year of 2018 increased by 30.1% year-on-year to reach 15.65 billion yuan, exceeding the company's previous operating target. After a series of operations, the company's business focused on three main directions: photovoltaic power generation, engineering construction, and semiconductor packaging testing. In 2018, as the construction of the national integrated circuit industry continued to expand, the company's Eleven Technology obtained a significant engineering project turnkey and construction order scale and was effectively implemented, enabling the company to achieve significant revenue growth, while other major businesses also basically maintained a steady trend, and various businesses progressed steadily. The business structure affects gross profit margin, and operating efficiency has improved steadily: In 2018, the company's gross margin fell 0.3 percentage points year on year to 13.3%. The main reason for the decline in gross margin was changes in the business structure. The gross margin of the general engineering contract business was relatively low, so the increase in revenue scale affected the company's overall gross margin level. Looking at business segments, the gross margin of each business basically fluctuated slightly within a steady range. In terms of operating expense ratios, as the company's business is concentrated in high-tech industries such as semiconductors, the growth in the scale of R&D investment is in line with expectations, while other cost rates are basically in the process of declining, indicating that there is also a positive trend in improving the company's effectiveness at the management level. In 2019, the focus was on the high-tech sector, and the third business started smoothly: the company got off to a good start in 2018. In 2019, the company's strategy “focused on building two major sectors”, which focused on improving the quality of economic operation and optimizing the operation of semiconductors and high-tech engineering services. We believe that in the semiconductor field, on the one hand, the company's cooperation with South Korea's Hynix is expected to increase the space for cooperation after entering the third phase. On the other hand, it is also worth looking forward to gradually opening up the sealing and testing business space at major domestic memory bases under the conditions of memory sealing and testing technology accumulated over many years. In terms of engineering construction, previous business orders can still be effectively promoted, the country still has effective policy support in terms of industrial investment, and after acquiring Eleven Technology, the company also improved the efficiency of its management and used more effective and positive methods to exert its capabilities, so future growth space can still be expected. We believe that the photovoltaic business has also basically gone through the policy risk process and will stabilize in the future in terms of power plant operation. Investment advice: We forecast the company's earnings per share for 2019 to 2021 of $0.31, 0.42, and 0.53, respectively. The return on net assets was 8.8%, 10.7%, and 11.5%, respectively, and the investment rating was raised to the Buy-B investment recommendation. We believe that after focusing more on the business, there is still room for improvement in management efficiency, and that both photovoltaics and engineering will enter a relatively stable process, and the semiconductor packaging and testing business will benefit from domestic and foreign manufacturers in the process of expanding production, so the investment rating will be raised. Risk warning: The execution speed of engineering project orders falls short of expectations; PV projects are less affected by industrial policies; orders for semiconductor packaging and testing services do not match expectations with capacity construction; increased market competition exceeds expectations and affects profit levels.