Why do we think the company's revenue scale will grow rapidly in '19? New retail side: The “sprawling” plan allows channels to sink rapidly, forming an intensive sales network; empowering offline stores through online platforms, increasing the potential consumption power of products and expanding the scale of revenue. 1) Offline channels — “Gedi”: In 2019, the company plans to open 1,600 new small-area community stores, “Mengjie Small Stores”, to gradually reduce the channels to prefecture-level and county-level cities. The stores mainly target residents and consumers in the vicinity of 3-5 kilometers, forming a dense network of small stores, thus enabling the company's revenue scale to increase rapidly. 2) Online channels — “paving the sky”: As a complement to traditional e-commerce channels, the company empowers offline stores and creates a new retail model by building the “One House of Good Goods” WeChat online platform. Using the advantages of the WeChat social networking platform, we connect with a wide range of C-side customer groups through many small B-terminals with marketing capabilities to achieve comprehensive online and offline coverage, expand the customer base, increase membership stickiness, and deeply explore consumer purchasing potential. Traditional channel side: increase online layout to expand scale and enhance brand influence; continue to build a full-brand home and lifestyle center offline to enhance brand image. 1) Traditional offline channel side: In '19, by encouraging excellent dealers to launch “5+3” full-brand stores to enhance brand image and expand influence, 18H1 Company's total brand collection stores reached 44. We expect the company to open 50 new collection stores in '19. 2) Traditional e-commerce channel side: Currently, the company's online channel does not account for much revenue. It is estimated to be around 10%, and the scale is less than 200 million yuan. There is still plenty of room for improvement. The company increased the layout of online channels in 2018 to enhance the promotion and promotion of online channel products and expand brand awareness and influence. It is expected that in '19, the company's online channels (including the One House Good Goods channel) will achieve rapid growth and continue to increase in scale. We believe that in 2019, the company's channel stores are expected to reach more than 4,000, driving rapid growth in offline revenue; at the same time, online channels (including the Yiwu Good Goods Platform) will achieve rapid growth, and the scale will continue to rise. Therefore, we expect the company's revenue to grow by more than 20% in 2019 and achieve a revenue scale of around 3 billion dollars. Why does the company's net profit have more flexibility and room? Mainly, there is a lot of room for compression on the company's expenses side, which helps to increase net profit. 1) Compared with other comparable listed companies in the same industry, Mengjie's sales expense ratio has been in the first position since '11. It was 10 pct higher than the second place in '17, and there is a lot of room for compression on the cost side. 2) Stores opened in '19 mainly through franchise channels, and the proportion of directly-managed stores is expected to decline, which is beneficial to the reduction of the company's cost side; 3) Use information systems to achieve comprehensive budget management and formulate relevant plans and standards for expenses such as opening a store to strictly control costs and expenses; control and accounting on the cost side will be more reasonable, which will help improve profitability. The company's net interest rate in 2018 is 3.95%. We believe that the company's net profit in 2019 is expected to reach about 200 million yuan, and the net interest rate is expected to increase by 2pct to about 6%. First coverage, given a “buy” rating, with a target price of 8.17 yuan for 3-6 months. In 2018-2020, we expect the company to achieve revenue of 2,348 billion yuan (+21.4%), 3,005 billion yuan (+28%), 3,946 billion yuan (+31.32%); net profit of 93 million yuan (+80.9%), 205 million yuan (+120.94%), and 285 million yuan (+39.20%). The company's EPS for 18-20 is expected to be 0.12 yuan, 0.26 yuan, and 0.37 yuan, and the corresponding PE is 42.63/19.30/13.86. We conduct PS valuations based on comparable listed companies in the home textile industry: Rollei Life, Mercury Home Textiles, and Fuana. The 2019 industry average was 2.12X. Based on the industry average, the company was given 2.12XPS corresponding to 2019 revenue, with a target price of 8.17 yuan. Risk warning: terminal consumption is weak; offline Mengjie store expansion falls short of expectations; franchisee inventory risk; franchisee profit falls short of expectations, leading to widespread store closures; promotion of online e-commerce platforms falls short of expectations; and traditional online e-commerce layout falls short of expectations.