The 2018 and 1Q19 results were in line with market expectations and goodwill impairment, resulting in significant losses in 2018. Operating income was 3.42 billion yuan, an increase of 41.3% over the previous year, mainly due to the merger of Longxin Technology; net profit of 3.15 billion yuan. The sharp shift in profit was mainly due to Liao Liangmao, the controller of Longxin Technology, who violated external guarantees, which caused difficulties in cash flow turnover. The parent company calculated debts and bad debt preparations of 1.07 billion yuan, and estimated impairment of Longxin Technology's goodwill value by 2.27 billion yuan. Excluding the influence of Longxin Technology, the company's net profit in 2018 was 280 million yuan, an increase of 16.0% over the previous year. The company's performance is in line with previous forecasts. Operations generally returned to normal in 1Q19. In 1Q19, the company's revenue was 831 million yuan, up 4.1% year on year, and net profit was 61.16 million yuan, down 38.4% year on year. After excluding this impact, we estimate that the company's main business revenue increased by about 8% year on year, and profit increased by about 43% year on year, considering the merger of Long Xin in 1Q18 but the basic stagnation in 1Q19. The 1Q19 gross margin fell 5.4ppt to 28.7% year on year. The expense ratio remained stable over the period, and the net profit margin fell 5.1ppt to 7.4%. In 1Q19, the company's cash flow from operating activities was 160 million yuan, a slight improvement over the same period last year. The development trend is looking forward to the completion of the divestment of Longxin Technology. After fully accounting for impairment of goodwill and bad debt preparations, the company's credit on the books is 0. We believe that the risk of Longxin Technology has been basically eliminated, and the company is expected to divest Longxin Technology in '19 and return to the main rail transit and new energy vehicle parts business; if the divestment is successfully completed, the company is expected to turn a loss into a profit in 2019. The main business is expected to grow rapidly in 2019. In 2018, the company's main rail transit business increased by 18.8% year on year, and the revenue of new energy vehicle parts increased by 83.2% year on year, maintaining a good development trend. We expect the railway completion mileage to reach 8,344 km/9,096 km in 19/20, an increase of 78%/9%, respectively; in 19/20, a total of 999/1,393 kilometers of subway lines were added nationwide, an increase of 1%/39% over the previous year. The company's door system business will directly benefit from the increase in equipment procurement brought about by the peak traffic opening. Moreover, by the end of 2018, the company had orders in hand of 3.77 billion yuan, an increase of 28.6% over the previous year, which will guarantee the rapid growth of the company's main business. The profit forecast takes into account the steady growth of the company's main business. We raised the 2019/20e profit forecast by 5%/6% from $0.29/0.35 to $0.30/0.37. The valuation and the proposed company's current stock price correspond to 19/20e 18x/14x P/E. Due to the high level of prosperity in the rail transit industry, we raised the company's target price by 23% from 4.10 yuan to 5.45 yuan, corresponding to 18x/15x 19/20e P/E, with a potential upside of 3%, maintaining a neutral rating. The divestment of the venture subsidiary Longxin Technology is progressing less than expected.