Q2 performance reversed losses, net profit increased 25%, and cost control results were remarkable: revenue for the first half of 2018 was 190 million/ -16.87%; net profit of 2013.84 million/-47.90%; the difference in revenue and net profit growth was mainly due to the fact that Zhang International Hotel received 24.1816 million yuan in compensation for demolition in the same period last year; net profit after deduction of 143.28 million/ +1.72%, EPS 0.05 yuan, mainly benefited from a reduction in three fees. Overall gross margin for the first half of the year decreased by 3.61 points year-on-year to 33.52%. Among them, Q2 revenue was 134 million/ -16.22% (a slight improvement from Q1's revenue of 56.5548 million/ -18.81%, benefiting from an increase in the number of purchasers of eco-friendly passenger transport and sightseeing trams), net profit of 350210 million/ +24.76%. The increase in non-net profit for the Q2 quarter also benefited from a decrease in the cost rate. Of the three fees, the financial expense ratio is 0.66% /-4.37pct, because interest on loans in Dayong Ancient City can be capitalized; the sales expense rate is 3.58% /-1.59pct, due to reduced advertising expenses; and the management expense rate is 17.65% /-0.18pct. Employee remuneration is reduced due to strict control of management expenses and changes in subsidiaries included in the scope of consolidated reports. Hub road construction and environmentally friendly passenger bus fares are limited, affecting profits: 1H18. The number of ticket purchasers for the company's various scenic spots is 2,535,200,/-8.55%. By business, 1) Environmentally-friendly passenger transport of 1,455 million/ -9.00%, revenue of 752347 million/ -17.01%, mainly due to the impact of reduced ticket prices (peak season discount price for single person was reduced from 60 yuan to 30 yuan, off-season preferential ticket price was reduced from 26.75 yuan to 21.35 yuan); 2) 522,900 people/ +6.19%, revenue of 208.207 million/ -8.15%; 3) Baofeng Lake, 2969 million/ -4.57%, revenue was 2,4978.78.1%;) Received The impact of the construction of Wulingshan Avenue, Yangjiajie Ropeway had 217,300 people/ -25.22%, revenue of 14.3626 million/ -19.96%; 5) Zhang International Hotel's revenue was 7,512,900 million/ -9.27%; 6) Zhangjiajie China Travel Service's revenue was 53.074 million/ -20.18%. The ancient city of Dayong continues to advance, and Wulingshan Avenue is expected to be opened to traffic on the 11th: with the opening of the Qianzhangchang High-Speed Rail, the Zhangsang Expressway, and many popular domestic routes in 18-19, Zhangjiajie is expected to usher in an era of major transportation. The ancient city of Dayong continued to advance. It received a government subsidy of 1,3656 million yuan in the first half of the year. After opening, it will become the vanguard of leisure in natural scenic spots. Traffic restrictions for the construction of Wulingshan Avenue will end on September 30, and it is expected that passenger traffic will pick up somewhat after the end. Profit forecast: Affected by falling ticket prices for scenic spots and declining passenger flow, we lowered EPS for 18-20 to 0.11/0.11/0.14 yuan, respectively. Considering the potential for future passenger flow growth due to the opening of the ancient city of Grand Dragon, we maintain the “increase in holdings” rating. Risk warning: Due to slow road construction, passenger flow falls short of expectations, and the progress of the Dayong Ancient City project falls short of expectations.