The performance exceeded expectations. Maintaining the “buy” rating, the company released its 18-year annual report, achieving revenue of 2,299 billion yuan, YoY -0.21%, net profit of 387 million yuan, YoY +36.13%, and net profit of non-return mother YoY +7.93%. The performance exceeded our and the market's expectations. Performance compensation from Golden Point Garden was 776.744 million yuan, which is the main source of non-recurring profit and loss. Earlier, the company announced that net profit of 980-12 million yuan will be realized in 19Q1. We are optimistic about the company's steady business style and the increase in performance brought about by the expansion of new businesses (wood fun and mine restoration). We expect the company to maintain its “buy” rating of 0.75/0.96/1.19 in 19-21 with an EPS of 0.75/0.96/1.19 yuan. Revenue structure improved, profitability increased. In 2018, the company's ecological restoration/ecological cultural tourism business achieved revenue of 1,250/1,019 billion yuan, YoY +25.85%/-19.88%, respectively, accounting for 52.63%/44.32% of total revenue. Revenue from the ecological and cultural tourism business has declined, mainly due to the obvious synergy between Jindian Garden and the parent company, and the corresponding decline in undertaking real estate and garden business. The first batch of mine ecological management and restoration projects in Ju County was successfully implemented, and the mine restoration business contributed incremental revenue. In 2018, the company's comprehensive gross margin increased by 6.99pct to 34.26%. The main reason for the increase in gross margin was: 1) the gross margin of the ecological restoration business increased markedly by 5.21pct to 34.21%, and 2) the share of the ecological restoration business in revenue increased by 10.89pct to 52.63%. The company's net profit margin increased 4.49pct to 16.82% in 2018 from 12.33% in '17, and profitability increased markedly. Cash flow has improved markedly, and cost control capabilities still need to be strengthened. The company's net operating cash flow in 2018 was 164 million yuan, YoY +183.29%, a year-on-year increase of 360 million yuan compared to -196 million yuan in '17, mainly due to the company's strengthened repayment management, and the cash flow situation improved markedly. The overall cost rate for the 18-year period increased by 3.76pct to 11.14%, and the management (including R&D expenses) /financial expense ratios were 7.03%/4.11%, respectively, up 1.37pct/2.39pct from '17. Among them, the increase in the management expense ratio is mainly due to the increase in investment in R&D personnel and R&D consumables at Luzhiyuan, resulting in an increase in the R&D expense ratio of 1.05pct to 1.60%; the increase in the financial expense ratio is mainly due to the increase in the size of bonds and the increase in financing costs, and cost control capabilities still need to be strengthened. The fixed increase completed favorable order execution, and the business adjustment began to show results. In March '19, the company completed a fixed increase, raising 930 million yuan in capital. The successful issuance of fixed increases will directly benefit the execution of ongoing projects and ease the financial pressure on the company. The company's 18-year balance ratio is 60.37%. After the issuance is completed, we expect the debt ratio to fall below 55%, which is at a low level in the industry. The company's performance has maintained a relatively rapid growth rate for three consecutive years since its listing. In 16/17/18, net profit of the mother was YoY +89%/36%/36%. We think it is related to the company's more pragmatic philosophy. In 2018, the company controlled the scale and type of contracts signed in a timely manner, and the execution of existing orders was relatively smooth. At the same time, it proposed the strategic development direction of “ecological restore+ecological cultural tourism+ecological products”. The three major businesses went hand in hand. Since the ecological product “Mufun” is in short supply, the company continues to build new production capacity, improving overall profitability and cash flow. Performance growth is steady. Maintaining the “buy” rating, we expect the company to have an EPS of 0.75/0.96/1.19 yuan in 19-21 (the original value of 19/20 EPS was 0.82/1.01 yuan). The adjustments are mainly due to an increase in the gross margin of the ecological restoration business and an increase in the company's share capital. Referring to the average PE valuation level of 19.00X for comparable companies in '19, we believe that the company's profit quality is high, and that the volume of investment can be expected. Approval was given to 23-24X PE in '19, corresponding to a reasonable price range of 17.25-18.00 yuan, maintaining a “buy” rating. Risk warning: The development of the mine restoration business fell short of expectations, and the Muqu business fell short of expectations.