Hilong Holdings recorded revenue of RMB 3.22 billion for the full year of 2018 (up 21% year on year), which was better than our expectations of RMB 3.11 billion; operating profit increased 138% year over year to RMB 540 million, better than our expectations of RMB 4.1 billion. Excluding the impact of one-time exchange gains and losses on interest expenses, net profit is in line with our expectations. The company's overall performance is in line with expectations. We maintain our 19/20 paving earnings per share forecast of RMB 0.14/0.18, and forecast paving earnings per share of RMB 0.22 for the year 21. To reflect our positive view of the company's future, we raised our target price from HK$0.88 to HK$1.09, corresponding to a price-earnings ratio of 6.0 times in 2019. The current price has room to rise by 19.8% from the target price, and we maintain our excess rating. Strong operational performance. OCTG's coating business revenue increased 39% year over year to RMB 230 million, driving revenue in the oilfield equipment manufacturing service sector to increase 9% year on year to RMB 1.43 billion, better than our expectations; drilling and related service revenue increased 32% year on year, driving oil service sector revenue up 31% year on year, and gross profit contribution reached 40.8%; benefiting from Hilong and Malaysian partners finalizing offshore ship workload for the 4th quarter of '18, the offshore sector's revenue increased 133% year over year. Steady revenue growth, combined marketing expenses decreased by 26.3% year on year, driving a sharp increase in operating profit by 138% year on year. Operating cash flow increased 83.2% year over year to RMB468 million, covering 95.6% of operating profit. The return on equity increased from 3.69% to 4.49% year over year. The balance sheet is sound. Compared with '17, the company's inventory turnover days in '18 decreased 13% year over year to 142 days. Benefiting from proper implementation of the company's internal policies, the number of accounts receivable days fell from 290 days to 253 days year over year. The number of days for accounts payable fell from 207 days to 190 days. The liquidity ratio rose from 2.16 at the end of 17 to 2.25 at the end of 18. The order flow was very positive. Hilong announced that it received an order for offshore engineering services. It is expected that operations will begin in '19, and that the full amount of revenue for '19 will be taken into account. The contract amount is equivalent to 106% of the offshore sector revenue for the full year '18 (RMB 330 million) and 10.6% of the revenue for the full year of '18. Given Hilong's high share of the offshore engineering services market, we expect this contract to record a significant gross profit margin. In addition, Hilong announced that it has obtained a high-margin contract for steel pipe corrosion protection and weight distribution with a value of RMB 67.6 million, which is expected to record revenue in '19. We believe Hilong's continued inflow of orders will strongly support the company's profit expansion. Maintain the “Overweight” rating. The company's overall performance is in line with expectations. We maintain our 19/20 paving earnings per share forecast of RMB 0.14/0.18, and forecast paving earnings per share of RMB 0.22 for the year 21. To reflect our positive view of the company's future, we raised our target price from HK$0.88 to HK$1.09, corresponding to a price-earnings ratio of 6.0 times in 2019. The current price has room to rise by 19.8% from the target price, and we maintain our excess rating.