The 2018 results slightly exceeded our expectations, and Aijian Group announced 2018 results: operating income +14% to 2.65 billion yuan, net profit to mother +40% YoY to 1.16 billion yuan; of these, 4Q18 revenue was -1.4%/+44% YoY to 840 million yuan, and net profit was +38%/+23% YoY to 340 million yuan, mainly due to trust business growth exceeding expectations. Development trends Trust business growth has exceeded expectations, and active management capabilities have been continuously improved. Aijian Trust's revenue in 2018 was +3% to 1.7 billion yuan, with revenue contributing 64%; net profit +24% year over year to 1.1 billion yuan (vs. industry -11%), and profit contribution of 96%. On the one hand, the company took the initiative to reduce the channel and increase the scale of active management. At the end of 2018, the size of trust assets was -24% to 25.7 billion yuan (vs. industry -14%), of which the active management scale was +20% to 66 billion yuan, accounting for +9ppt to 26% year over year. At the same time, the average return rate of the company's trust business increased significantly, +0.1ppt to 0.64% year over year, driving net income from trust fees and commissions (the caliber of unaudited subsidiary statements). On the other hand, the company is actively exploring innovation and transformation, and has set up a consumer finance and ABS product promotion working group, which has been approved by the Banking Regulatory Commission to operate QDII. At the same time, the company actively develops layouts and strengthens external cooperation in urban renewal, consumer finance, supply chain finance, and special purpose trusts to build future profit growth points. The financial sector has a diverse layout, and business collaboration continues to deepen. 1) Financial leasing: Aijian Leasing's revenue in 2018 was 12% to 280 million yuan, and net profit was -8% to 90 million yuan, further increasing investment in the healthcare and education sectors, and the interest-bearing asset scale was +32% to 4.2 billion yuan. Meanwhile, the company completed the acquisition of Huarui Leasing in September '18. As of the end of '18, Huarui's assets were worth 4.9 billion yuan, with revenue/profit contributions of 1.5/40 million yuan respectively; 2) Asset Management & Wealth Management: Aijian Asset Management's net profit margin for 18 years was +195% to 130 million, and Aijian Wealth Management's profit loss narrowed to 86,000 (vs. 7.05 million in '17). Furthermore, the company actively lays out various fields such as securities and private equity investment to strengthen inter-business collaboration and promote capital expansion, business innovation, and financial resource integration capabilities. The majority shareholders continue to increase their holdings, and the advantages of the private sector system are prominent. Junyao Group, the majority shareholder of the company, has a broad business layout and strong comprehensive strength. It continued to increase its holdings during the reporting period (holding 28.34% of shares as of February 1, 19), and is expected to form a strong synergy with the company. At the same time, as the first private enterprise in mainland China since domestic reform and opening up, after the company successfully returned to the private sector system, its business philosophy and development strategy became more flexible, and its innovation momentum and ability to innovate were further enhanced. With the loosening of credit conditions beyond expectations since the beginning of '19 and the marginal relaxation of regulations represented by trusts, it is expected to bring about a repair in the sector's valuation. Profit forecast Due to the assumption of increasing the size of trust assets, we raised our profit forecast for 2019 by 10% to 1.45 billion yuan, and introduced a profit forecast of 17.01 billion yuan for 2020. Valuation and recommendations The company's current stock price corresponds to 1.7 times P/B in '19, maintaining the recommended rating, and raising the target price by 9% to 14.77 yuan, corresponding to 2.2 times P/B in '19 and 16.5 x P/E in '19, with 26% upside compared to the current stock price. Venture trust and leasing business growth and asset quality fell short of expectations; regulatory uncertainty.