Net profit for shareholders increased 15.5% year-on-year to HK$1,012 million in 2018, in line with market expectations. Total revenue increased 13.1% year over year to HK$17,130 million, of which jewellery retail sales increased 18.0% year on year and other business decreased by 21.2% year over year. Same-store sales in Hong Kong and Macau increased 18%, while same-store sales in mainland China increased 3%. Gross margin increased 0.6 percentage points to 24.6% year on year, and operating profit margin increased 0.9 percentage points year over year, benefiting from operating leverage and rent cuts in Hong Kong. Remain cautiously optimistic about 2019 performance. According to management, despite disappointing performance in the fourth quarter of 2018, same-store sales in mainland China and Hong Kong both recorded positive growth in the first quarter of 2019. The company launched a new brand, MINTYGRREN, in 2018, which focuses on providing affordable everyday wear jewelry to young people, and plans to expand sales channels in 2019. We expect the overall macro environment to remain challenging in 2019, but the company can achieve steady growth based on its expansion strategy and diversified brands. We maintain an investment rating of “Collection” and a target price of HK$15.20. We slightly increased our earnings per share in 2019 and 2020 to HK$1.583 and HK$1.695, respectively. The target price is equivalent to 9.6 times and 9.0 times the price-earnings ratio in 2019 and 2020, which is attractive compared to its historical valuations. Downside risks include lower-than-expected same-store sales growth and narrower profit margins.