The 17-year results were largely in line with expectations. In 2017, the company's revenue was 34.549 billion yuan, up 16.18% year on year; operating profit was 1,481 billion yuan, up 10.01% year on year; net profit after deduction was 702 million yuan, a sharp increase of 102.42% year on year, basic earnings per share of 0.50 yuan. The profit distribution plan was a discovery dividend of 2.00 yuan (tax included) for every 10 shares, and the company's annual results were basically in line with expectations. In 2017, the company's non-recurring profit and loss totaled 72.38 million yuan, including 35.3 million yuan in current asset disposal profits and 33.23 million yuan in government subsidies included in current profit and loss. Currently, the company's main business is supply chain services and new chemical energy. The growth rate of the trading industry's performance has improved for 18 years, and it is cautiously optimistic. The company's supply chain services mainly involve consumer goods import and export trade and e-commerce platforms, and is committed to providing one-stop value-added services for the entire supply chain. In 2017, the company's trade industry revenue was 33.170 billion yuan, up 16.06% year on year. The growth rate increased significantly from 5.25% in 2016, accounting for 96.17% of the company's revenue, which is basically the same as 96.21% in 2016. Specifically, export trade revenue was RMB 31,218 billion, up 21.61% year on year, accounting for 90.52% of revenue, accounting for an increase of 4.2 percentage points over 2016; revenue from import and domestic trade was RMB 1,952 billion, down 30% year on year, accounting for 5.66%. The increase in the company's trade industry performance mainly benefits from two points: First, the growth of our import and export trade industry. In 2017, China's total exports and imports were US$22,629 billion and US$1842.9 billion respectively, up 7.85% and 16.10% year-on-year respectively. Second, the company's supply chain service is mainly engaged in textile and garment exports, and has strong market competitiveness. In '17, the company and its holding subsidiaries Huasheng Industrial, Guohua Industrial, Hemp Trading, Litian Industrial, Guosheng Industrial, Yida Industrial, and Guomao Industrial all ranked among the top 50 textile and garment exporters in China, ranking 4th, 11th, 18th, 29th, 30th, 34th and 42nd respectively. In the first quarter of '18, China's total exports and imports were US$5452 and 496.9 billion, respectively, up 14.07% and 18.91% year-on-year respectively, continuing the high level of growth. However, trade protection is on the rise, and trade disputes between China and the US still have great uncertainty. We remain cautiously optimistic about China's import and export trade throughout the year. The steady growth of new chemical energy sources is expected to continue to grow for 18 years. In April '17, the company established a wholly-owned subsidiary, Ruitai New Energy as a business development platform for new chemical materials and new energy. The holding subsidiaries mainly include Huarong Chemical and Chaowei New Materials. Currently, the company's main new chemical products include lithium battery electrolytes, silane coupling agents, and electronic chemicals. In 2017, the total sales of the company's chemical industry were about 19785 tons, up 9.77% year on year; corresponding revenue was 1,197 billion yuan, up 9.53% year on year. The growth rate declined significantly from 50.25% in the first half of '17, accounting for 3.47% of the company's revenue. Among them, Chaowei New Materials's revenue was 65.92 million yuan, up 153.78% year on year. The company's growth in the chemical industry has mainly benefited from the sharp increase in revenue and electrolyte sales of Chaowei New Materials. The electrolyte industry is expected to benefit from stabilizing electrolyte prices and increasing sales of new energy vehicles in China in 2018. In 2017, China's total NEV sales volume was 767,800 units, up 53.03% year on year, accounting for a total of 2.65%; total sales volume in the first quarter of '18 was 140,700 units, up 158.59% year on year, accounting for a total of 1.96%, and is expected to maintain a high growth rate throughout the year. Follow the progress of the electrolyte project in Poland. Since EU countries are vigorously popularizing and promoting electric passenger cars, and South Korea's lithium battery companies are rushing to build factories in Europe, and Huarong Chemical has been a strategic partner for Korean customers for many years. In December '17, the company announced an investment announcement: it is proposed that the company's wholly-owned Ziruitai New Energy and Huarong Chemical, a holding subsidiary of the company, will each invest 50% of the Polish company to implement a 40,000 tons/year lithium-ion battery electrolyte project in Poland. The total investment of the project is 300 million yuan, of which Ruitai New Energy has raised 150 million yuan, and Huarong Chemical will invest 150 million yuan from its own capital Yuan. The construction period of the project was about 30 months, and the annual revenue after delivery was 2.2 billion yuan, the total profit was about 392 million yuan, and the profit after tax was about 318 million yuan. Results continued to grow in the first quarter of '18. In the first quarter of '18, the company's revenue was 7.601 billion yuan, up 5.86% year on year; operating profit was 629 million yuan, up 120.45% year on year; net profit was 228 million yuan, up 48.06% year on year; net profit after deduction was 10.26 million yuan, a sharp drop of 93.25% year on year, with basic earnings per share of 0.14 yuan. In the first quarter of '18, the company's non-recurring profit and loss totaled 218 million yuan, mainly due to Cathay Pacific Investments' disposal of Landsea Group shares. In addition, the company expects net profit for the first half of 2018 to be 406-516 million yuan, an increase of 10-40% over the previous year. It is mainly due to the steady development of the company's main business, and the performance is greatly affected by the exchange rate. The decline in profitability is expected to remain flat overall in '18. In 2017, the company's gross sales profit was 11.54%, down 0.44 percentage points from the previous year, mainly due to changes in the revenue structure of the main business. By industry, the gross profit margin of the trade sector was 10.58%, down 0.82 percentage points from the previous year, but increased 0.42 percentage points from the first half of '17, with export trade being 11.14% and import and domestic trade being 1.58%; the chemical industry was 31.60%, a significant increase of 6.20 percentage points over the previous year. In the first quarter of '18, the company's gross sales margin was 7.67%, down 2.96 percentage points from the previous year. The company's overall operation is steady. It is expected that the chemical industry's revenue growth rate will increase in 2018, and the added value will be high. Overall profitability is expected to remain flat in '18. Maintain the company's “gain” investment rating. The company's diluted EPS in 2018-19 is estimated to be 0.61 yuan and 0.73 yuan respectively. Based on the closing price of 7.33 yuan on April 25, the corresponding PE is 12.0 times and 10.0 times, respectively. Currently, the valuation level is lower than that of the lithium battery sector, but considering its relatively high share of trade revenue, it maintains an “incremental” investment rating. Risk warning: Domestic and foreign economic decline exceeds expectations; NEV progress falls short of expectations; industry competition intensifies; exchange losses