Event: In 2018, the company achieved operating income of 1.78 billion yuan, a year-on-year increase of 38.55%, net profit of 100 million yuan, a year-on-year increase of 4.99%, and a year-on-year non-net profit of 93.77 million, a year-on-year increase of 22.99%. PPP orders are being implemented at an accelerated pace, and profitability has increased dramatically, helping the company's performance grow! Since 2016, due to the country's increased investment in agriculture and rural areas and the implementation of the PPP model in the field of agricultural and rural infrastructure construction, the company's leading advantages have been highlighted, and orders have grown rapidly. In 2017-2018, the company's new orders reached 3 billion and 4.5 billion, respectively, with year-on-year growth rates of 88% and 52%, respectively. Furthermore, as the company continues to place large PPP orders, the company's profitability is also expected to continue to increase. Looking at 2018, the gross margin of the company's water-saving projects reached 24.21%, an increase of 5.04 percentage points over last year, and the gross margin of water-saving materials reached 50.30%, an increase of 18.52 percentage points over last year. The company's overall gross margin reached 28.46%, up 2.1 percentage points from last year. The increase in the company's revenue and profitability is a core factor in the growth of the company's non-net profit. In 2018, due to factors such as rising company financial expenses and calculation of asset impairment losses, the company's profit growth rate failed to achieve rapid growth. We expect that with the easing of financial policies and the gradual release of company orders, the company's performance is expected to accelerate. Rural revitalization brings a period of opportunity for company development, and the traditional main business is expected to continue to grow at a high rate! In September 2018, the “National Rural Revitalization Strategic Plan (2018-2022)” was officially released, proposing to strengthen agricultural and rural infrastructure construction, and the development of water-saving agriculture ushered in a period of opportunity. We expect agriculture and rural areas to become a top priority in the country's development and investment. Currently, the industry is still at a stage where the company is in a competitive position. As a leader, its competitive advantage is prominent; the company has strengthened cooperation with local water investment and operation platforms and financial platforms such as Cathay Pacific Water Conservation, Shanxi Water Investment, Qinghai Water Investment, and Henan Water Investment, etc., and the card position has been achieved. As the partnership progresses, we expect the company's orders to continue to grow rapidly. Extending from government business to enterprise business, the transformation of high-standard farmland operator companies draws on the business models and successful experiences of leading international water-saving enterprises and conforms to modern domestic agricultural trends. It will rely on its experience and advantages in farmland construction and operation to develop non-government market resources to provide farmers, enterprise groups and other customers from farmland standardization, agricultural IoT technology services, farmland operation, farm planting technology services, etc., which will further open up space for company growth! Giving a “buy” rating: It is expected that in 2019-2020, the company will achieve revenue of 25.50/3318/4.272 billion, an increase of 43.29%/30.12%/28.75%, achieve net profit of 2.06/3.04/451 million, an increase of 105.94%/47.27%/48.55%, corresponding to EPS of 0.26/0.38/0.57 yuan, respectively, and PE corresponding to the closing price of April 17 is 31 times, 21 times and 14 times, taking into account the company's broad development space With the rapid growth in performance, it continues to be given a “buy” rating! Risk warning: 1. National policy changes; 2. Order implementation falls short of expectations; 3. Business transformation falls short of expectations.