1. Investment Incidents Company Announces 2018 Annual Report. In 2018, the company achieved revenue of 1,866 billion yuan, an increase of 28.32% over the previous year. Achieved net profit of 168 million yuan to mother, an increase of 11.74% over the previous year. 2. The analysis determined that the performance was in line with expectations, and the design consulting business grew rapidly. In 2018, the company achieved revenue of 1,866 billion yuan, an increase of 28.32% over the previous year. Among them, the design consulting business completed revenue of 882 million yuan, accounting for 47.27% of the company's total revenue, an increase of 41.86% over the previous year, mainly due to a significant increase in the amount of design contracts; the engineering general contracting business completed revenue of 708 million yuan, accounting for 37.94% of the company's total revenue, an increase of 11.17%; the engineering supervision and project management business completed revenue of 179 million yuan, accounting for 9.59% of the company's total revenue, an increase of 31.67% over the previous year, mainly due to the company's merger of Zhejiang Consulting's annual data; bidding agency and consulting Completed revenue of 72 million yuan, accounting for 3.85% of the company's total revenue. During the reporting period, the company achieved net profit of 168 million yuan, an increase of 11.74% over the previous year. Achieved deducted non-net profit of 162 million yuan, an increase of 14.20% over the previous year. The company achieved a net cash flow of 89 million yuan from operating activities, a year-on-year decrease of 91 million yuan. EPS was 0.62 yuan/share, up 0.07 yuan/share year over year. There was an increase in gross margin and a slight decrease in the cost ratio for the period. The company's gross margin in 2018 was 25.11%, up 0.46pct year-on-year. The company's net profit margin was 9.60%, a year-on-year decrease of 1.57pct. The weighted return on net assets was 9.70%, up 0.37pct year over year. The company's expense ratio for the 2018 period was 11.89%, a year-on-year decrease of 0.12pct. Among them, the management expense ratio was 11.92%, a year-on-year decrease of 0.17pct; the financial expense ratio was -0.03%, an increase of 0.04pct over the previous year; and the sales expense ratio was 0.00%. In addition, the company's R&D expenditure was 84 million yuan, an increase of 54.59% over the previous year, mainly due to increased R&D investment by Zhuochuang Design, the company headquarters and various subsidiaries. Outreach promotes a nationwide layout, and an indirect investment in Ucloud is expected to benefit science and innovation. The company actively implements a development strategy combining endogenous growth and epitaxial development, actively carries out active investment, mergers and acquisitions, and takes advantage of the advantages brought by the capital market to complete the acquisition of 100% of Zhongheng Zhuochuang's shares, 69.13% of Huazao Design and Zhejiang Consulting's shares, and signed a “Equity Merger and Acquisition Cooperation Framework Agreement” with Ningxia Architectural Design and Research Institute to complete the joint venture establishment and balance plan to increase the company's shareholding in the VR company Lufou Impression and indirect investment in the cloud computing company Shanghai Ucloud Information Technology Co., Ltd. (Ucloud) to promote the company's strategic layout nationwide. Ucloud is a leading third-party cloud computing service provider in China. Ucloud provides three modes of service: public cloud, private cloud, and hybrid cloud. Public cloud is the core business, and private cloud and hybrid cloud are key development areas. Public cloud products include computing, networks, storage, databases, data analysis, distribution, etc.; private cloud core products include UMOS, UMStor, MCP, proprietary cloud services and containers; hybrid clouds are mainly composed of modules such as cabinet hosting, customized physical machines, VPN gateways, external networks, intranets, cloud interconnection services, and operation and maintenance services. Ucloud already has a number of industry-leading or innovative cloud computing technologies, including kernel hotpatching technology, data rollback technology, software-defined networking, load balancing technology, distributed databases, safe houses, etc. In the first half of 2018, Ucloud ranked sixth in the domestic public cloud market. Ucloud's application for listing on the Science and Technology Innovation Board has been accepted by the Shanghai Stock Exchange. In 2018, we achieved revenue of 1,187 billion yuan, an increase of 41.39% over the previous year, and realized net profit of 80 million yuan to mother, an increase of 4.54% over the previous year. Non-net profit was deducted to 83 million yuan, an increase of 53.61% over the same period. Currently, Ucloud has applied for listing on the Science and Technology Innovation Board and has been accepted by the Shanghai Stock Exchange. As of April 1, 2019, the top ten shareholders of Ucloud formed Yuanhe Zhongyuan Youyun Venture Capital Enterprise (Limited Partnership) in Suzhou Industrial Park, holding 10.18% of the shares. Suzhou Industrial Park Suyou Equity Investment Enterprise (Limited Partnership) is a shareholder of Suzhou Industrial Park Yuanhe Zhongyuan Youyun Venture Capital Enterprise (Limited Partnership) Zhongheng Design Group is one of the shareholders of Suzhou Industrial Park Suyou Equity Investment Enterprise (Limited Partnership). If Ucloud successfully lands on the Science and Technology Innovation Board, it is expected to take advantage of the capital market's financing advantages. As an indirect shareholder of Ucloud, Zhongheng Design is expected to share the dividends brought by Ucloud's growth 3. Financial Brief Analysis The company's revenue has increased steadily since 2013. In 2018, the company's revenue increased by 28.32% year-on-year. The company's net profit to mother increased 11.74% year-on-year in 2018. The company's revenue growth rate in a single quarter over the past eight quarters was relatively steady. 2018Q4 revenue growth rate was 32.46%. The company's net profit growth rate in the 2018 Q4 was 28.57%, up 23.57 pcts from the same period last year. The company's expense ratio declined from 2016 to 2018. Since 2015, the company's gross margin and net profit have been stable. 4. The investment proposal estimates that the company's EPS for 2019-2021 will be 0.86/1.08/1.14 yuan/share, respectively, and the corresponding dynamic price-earnings ratio will be 17/14/13 times, respectively, giving it a “recommended” rating. Risk warning: fixed asset investment declined; accounts receivable recovery fell short of expectations; delays fell short of expectations.