Event: The company published its 2018 semi-annual report on 2018.8.21. In the first half of 2018, the company achieved operating income of 4,082 billion yuan, an increase of 9.13% over the previous year; realized net profit of 153 million yuan, an increase of 26.7% over the previous year, and an increase of 16.69% over the previous year after deducting non-attribution. Among them, Q2 achieved operating income of 1,963 million dollars, an increase of 8.35%; net profit of the mother was 71 million yuan, an increase of 40.38%. Opinions: 1. Performance growth is in line with expectations. The pace of transformation continues, and there are plenty of orders in hand, and performance growth is basically in line with expectations. During the reporting period, we achieved revenue of 4,082 million dollars, an increase of 9.13%, net profit of 153 million dollars, an increase of 26.7%, and an increase of 16.69% after deductions. Among them, revenue from the construction business was 3.84 billion yuan, an increase of 30.9%, real estate sales revenue was 174 million, a decrease of 76.7%, and revenue from the new energy business was 67 million yuan, an increase of 15.8%; further deepening the transformation. The company focuses on the transformation and upgrading from real estate business to infrastructure business to expand business scale and actively develop infrastructure projects such as rail transit and municipal engineering. The construction business revenue for the first half of the year was 3.84 billion yuan, an increase of 30.9%, and the growth rate increased by nearly 17 pct over the same period last year. It accounts for 94%, an increase of nearly 16 pcts, an increase of nearly 9 pcts over the full year of 2017; there are plenty of orders in the main business. New projects received in the company's construction business in 2016/2017 increased by 30%/51% respectively, accounting for 1.8 times /2.2 times the current revenue ratio. Abundant orders drove the business's 2017/2018 H1 revenue increase by 23%/31%. The number of orders received by 2018H1 has also been reduced by 2%. As the market environment is getting closer, the order volume is basically the same as last year, and still maintains a high order revenue ratio of 2.1 times. It is expected that in the future, with the release of infrastructure projects in the Greater Bay Area of Zhejiang, the company, as a leader in regional infrastructure, will pick up in order growth. Currently, about 28.39 billion dollars of unfinished contracts have been signed, which is 1.9 times the revenue for the full year of 2017. Based on the forecast of the progress of ongoing contract projects, we expect the revenue growth rate of the construction business to reach 34% year on year in 2018, driving the company's overall revenue growth rate from -7.6% in 2017 to a positive increase of 18.7%. The company has predicted that the net profit of the mother will increase in the 0%-30% range from 2018.1-9, in line with our expectations; 2. After derealisation, gross profit declined, but overall profit levels increased slightly, and gross margin declined markedly due to increased investment cash outflow from investment in SPV and a decrease in the share of real estate business. The gross margin level of the real estate business is much higher than that of the construction business. The gross margin of the two in 2017 was 20.6%/7.9%, respectively. The real estate business accounted for 4.3% and 15.6 pct during the reporting period, resulting in a decline in overall gross margin. The gross profit margin for the first half of the year was 5.82%, down 3.1/3.9 pct from the full year of 2017-H1/2017, respectively. Among them, the gross profit margin for the second quarter reached a record low of 5.8%, a decrease of 1.4 pct month-on-month and 5.1 pct; the period rate was reduced overall, and the combined tax rate reduction slightly increased the overall profit level: the sales rate/management rate/financial rate during the reporting period was 0.13%/2.06%/1.53%, down 0.5/0.5/0.2 pct from the previous year, respectively, and the total period rate was 3.72%, down 1.2/0.4 pct from the full year of 2017-H1/2017. Management expenses are reduced, while repaying bank loans reduces interest costs. On the other hand, due to business adjustments, the parent company's share of profit (15% income tax rate) increased, resulting in an overall tax rate of 14.7% in the first half of the year, a significant decrease of 9.7/12.1 pct from 2017 H1/2017, respectively. The overall profit level increased slightly, with a net profit margin of 3.76%, an increase of nearly 0.4 pct over the full year of 2017-H1/2017; investment in SPV increased investment cash outflow. The company's net operating cash flow of 550 million yuan during the reporting period did not change much compared to 500 million yuan in the same period last year. The investment in the Taizhou-Hangzhou-Shaotai High Speed Rail Investment Management Partnership (limited partnership) of nearly 2.3 yuan resulted in a net cash flow from investment activities of 250 million yuan, a decrease of nearly 150 million yuan. The amount of cash flow from fund-raising activities -- 380 million -- increased compared to the same period last year - 230 million. This is due to the company's repayment of bank loans. Conclusion: During the reporting period, the company further deepened its business transformation, and the share of infrastructure construction business continued to increase. Its rapid growth led to a negative and positive trend in overall revenue growth. The current order in hand is 1.9 times the revenue in '17. Based on the project progress forecast, we expect this business's revenue to increase by 34% in 2018, driving a 19% increase in overall revenue. Although gross margin declined as a result of the restructuring of the business, the period fee rate was reduced across the board, and the combined tax rate reduction raised the overall level of profit. The estimated operating income of the company from 2018 to 2020 was 9.646 billion yuan, 10.92 billion yuan and 11.938 billion yuan respectively; earnings per share were 0.31 yuan, 0.37 yuan and 0.43 yuan respectively. The corresponding PE was 12.2X, 10.2X and 8.8X respectively, covering the first time, giving a “recommended” rating. Risk warning: management risk, financial risk, PPP project execution falls short of expectations