Revenue for the first quarter of 2019 was +22.91%, net profit +11.60%, the company's 2019Q1 operating income was +22.91% to 1,963 billion yuan, net profit was +11.60% to 326 million yuan, and non-net profit was +13.29% to 307 million yuan. Non-recurrent profit and loss mainly received government subsidies of 25.96 million yuan. The merger and acquisition of the Fuyang project led to an upward trend in performance, connecting with stable quantitative data. The company's merger and acquisition of Fuyang Gas in August 2018 is estimated to be one of the main growth points in the performance of 2019Q1. The company's 2019Q1 consolidated gross margin was +2.41 pct to 25.04%, mainly because the operating cost growth rate of 19.09% was lower than the revenue growth rate of 22.91%. The main reason is that the government subsidy for LNG procurement during the winter supply period confirmed in this period was not included in other income, but was treated as a reduction in operating costs, so the gross margin of the gas sales business rebounded year over year in 2018Q1, which was affected by the gas shortage. At the same time, since the gross margin of the company's urban fuel business is significantly lower than the gross profit margin of connectivity, in the face of a recovery in 19Q1 overall gross margin, we judge that the 19Q1 connection volume remains at a relatively stable level. In particular, the share of urban endogenous connections is expected to continue to rise. The balance ratio and financial expenses increased sharply, and operating cash flow declined sharply. The company's net operating cash flow in 2019Q1 fell sharply from +17.51 million yuan in 2018Q1 to -189 million yuan. The main reason was the increase in procurement expenses for the gas sales business in the current period. We believe that upstream price increases had an adverse impact on the company. With no major changes in revenue or business, and dividends not yet paid, the company's short-term loans were +295 million yuan and monetary capital - 221 million yuan compared to the end of 2018. Contrary to the changing trend in performance, it reflects a decline in profit quality. Affected by the Fuyang cash acquisition project last year, the company's current financial expenses were +13.18 million yuan to 13.79 million yuan, the financial expense ratio was +0.66 pct to 0.70%, and the balance ratio was +12.25 pct to 49.93%. Investment advice: Maintain the “buy” rating We maintain the company's profit forecast for 2019-2021 at 1,203/13.93/1,552 billion yuan. Considering the impact of stock issuance, the corresponding dynamic PE is 10.9x/9.4x/8.4x. Despite the decline in profit quality in the first quarter, I believe the situation will remain stable throughout the year. We are optimistic about the company's M&A execution and receiving station layout, maintain a “buy” rating, maintain a reasonable valuation of 11.7-12.5 yuan. Risks suggest that the growth rate of gas demand is slowing down, upstream gas prices are rising sharply, connection volume is declining, connection fees are falling, and extended mergers and acquisitions are lower than expected