Guide to this report: Poor financing/rising financing costs combined with a sharp rise in management expenses in a tight credit environment was the main reason for the negative increase in the company's performance in 2018. The company's multi-channel cooperation with state-owned assets was supported by policy priorities. Financing improved and performance is expected to pick up in 2019. Key points of investment: Maintaining an increase in holdings. Revenue of 13.3 billion yuan (-13%) /net profit of 1.6 billion yuan (-27%) in 2018 fell short of expectations, and the forecast for 2019-2021 EPS was 0.67/0.78/0.89 yuan (the original EPS in 2019-2020 was 0.82/0.96 yuan), a growth rate of 13/17/ 14%. The target price of 10.1 yuan is maintained due to the upward trend in the sector's valuation center. In 2019-2021, it is proposed to pay a cash dividend of 0.94 yuan (tax included) for every 10 shares to increase holdings. Poor financing and higher cost ratios dragged down performance, gross margin rose slightly, and net operating cash flow dropped sharply. 1) Q1-Q4 revenue growth rate of 106.6/4.5/-12.7/ -44.7%, net profit growth rate of 127.8/30.2/-22.1/ -52.7%, negative increase in 2018H2 performance mainly due to poor financing, slowing construction and accruing bad debts; 2) gross profit margin 34.1% (+2.5pct)/net interest rate 12.0% (-2.6pct), sales rate 0.3% flat/R&D and management rate 13.5% (+5.4pct) /financial rate 5.2% (+2.6pct); 3) Net cash flow of 50 million (-98%), payout ratio of 69.2% (+1.4pct)/payout ratio of 80.4% (+31.5pct); 4) asset impairment loss of $440 million (+11.7%), accounts receivable/total assets 21.4% (-0.2pct), balance ratio 69.3% (+1.7pct). Credit improvement and superposition policy focus support is beneficial to improving financing, while the company's streamlining personnel helps reduce management costs, and the results are expected to pick up in 2019. 1) Improved financing is beneficial to construction recovery progress: ① The introduction of state-owned Yingrun Huimin Fund (the actual controller transfers 5% of the shares) in December 2018 to enhance the company's financing reputation; ② it is proposed to issue 4 billion preferred shares and the application has been accepted by the Securities Regulatory Commission in January 2019; ③ The company is supported by policies as the leader and has issued 1.3 billion yuan in corporate bonds since 2019; 2) The fee rate is expected to decrease: ① Relaxed credit environment and liquidity are expected to reduce financing costs; ② The number of employees at the end of 2018 is expected to decrease; The number of employees is expected to decrease by 5244 people at the end of 2018 14.4% is beneficial for reducing management costs. Catalysts: Continued improvement in social finance data, smooth issuance of preferred stocks, reversal of performance growth, etc. Risk warning: Continued decline in social finance data, failure to issue preferred shares, continued decline in performance growth, etc.