Event: 1) 18 years of the company: revenue of 14.001 billion yuan / + 88.16%, net profit of 969 million yuan / + 205.89%. Among them, 18Q4 single-quarter revenue of 7.833 billion yuan / + 109.61%, return to the mother net profit of 880.6 million yuan / + 44.79%. 2) the company's 19Q1 in a single quarter: revenue of RMB 897 million /-14.08% and net profit of RMB 7.48 million /-79.92%. The decline in profit over the same period last year may be due to the unsettled items sold and the increase in financial expenses, which is expected to return to the normal level after the subsequent settlement of the project.

The transformation of culture and tourism continues to push forward, leading to a big increase in other business income. The operating income of ① commercial housing sales in the past 18 years was 11.354 billion yuan / + 84.88%, mainly due to the increase in income caused by the completion and carry-over of the new projects in this period, accounting for 81.10% of the total operating income, which decreased by 1.44pct compared with the same period last year. ② construction and decoration industry achieved operating income of 0.44 billion yuan /-22.90%, accounting for 0.32% of the total operating income, a decrease of 0.45pct compared with the same period last year. ③ 's other business revenue of 2.602 billion yuan / + 109.53%, accounting for 18.59% of revenue, increased 1.6pct over the same period last year, mainly due to the merger of Hunan overseas travel agencies, the opening of Tongguanyao ancient town and the increase in revenue driven by new hotels.

In 18 years, the gross profit margin increased steadily, and the rate of management expenses decreased significantly. 1) 18 full year: achieve gross profit margin 33.49%/+1.73pct, among which, 18-year gross profit margin of commercial housing sales is 38.06% Cash 3.97pct; sales expense rate is 6.38%/YOY+0.18pct, mainly due to the increase in sales scale of the current period; management expense rate is 5.50%/YOY-3.13pct, expense rate is significantly reduced The financial expense rate is 5.59%/YOY-2.61pct, which is mainly due to the completion and delivery of some projects and the use of interest on loans. However, due to the total investment income of 769 million in 17 years and only 415 million yuan in 18 years, the company's 18-year net interest rate is 8.93% Maxima 2.66% ROE (diluted) 15.26%, 1.93% higher than last year. 2) 19Q1: gross profit 20.31%/-5.31pct, sales expense rate of 8.06%, management expense rate of 13.79%, management expense rate of 4.57pct, financial expense rate of 18.86%, net interest rate of 19Q1-0.56%/-4.49pct.

The literature and tourism industry is the core competition of the company in the future, and the continuous expansion of the territory of the literature and tourism industry in the past 18 years is expected to continue to release performance. ① Tongguanyao Ancient Town: grand opening in August 2018, covering dozens of large-scale cultural and tourism projects such as 5D cinemas, museums, performing arts centers, hotels, inns and so on. It is a national tourism preferred project and a key project in Hunan Province. ② Juzi Ancient Town: the East Coast Scenic area was fully opened at the end of 18, while the West Bank completed delivery, the Ocean Show and Green Heart Valley Hotel officially opened, and the ancient town plans to achieve overall park closure operation in July 2019; ③ Langzhong Ancient City: the company succeeded in mergers and acquisitions in 2018 and officially opened in early 19, and the company plans to build an upgraded version of Langzhong International Cultural Tourism Resort. ④ Xining Children's Dream Park: it has been fully equipped for 18 years and is scheduled to open for operation in July 2019. ⑤ South Korea Fairview Villa: it has been approved by the local Taoist Council during the reporting period, and has obtained the "Xinhua Union Fairview Villa Tourism Park Project Development license" of Jeju Special Autonomous Road in March 2019. ⑥ Beiwai Xining International Middle School & Changsha Beiwai Yali International Middle School: the company tries the education industry in order to realize the linkage of education, culture, tourism and other industries.

The real estate business continues to contribute stable performance and cash flow support to the company, helping the company to make steady progress in the transformation of literature and travel. During the reporting period, the real estate industry cooled down as a whole, and the real estate sector was affected by the regulatory tone of "deleveraging, de-inventory", and the growth rate tended to slow down, but the company still had a good location layout and excellent business strategy. High-quality customer service has been recognized by the market. ① real estate project development: both quality and speed, the whole year opened and resumed work of 4.79 million tons, completed delivery of 1.25 million tons, effectively ensuring the carry-over of income and profits of listed companies; commercial housing inventory of 238.26 billion yuan /-1.18%, reflecting the company's response to the "inventory" policy tone, a small de-stocking ② real estate project sales: 18 years to achieve contracted sales area of 880400 square meters, sales amount of 10.702 billion yuan, settlement area of 1.0436 million square meters, settlement amount of 11.354 billion yuan, a record high. Xinhua Lian Tongguanyao Ancient Town Scenic spot contributed to the sales growth of Changsha area, successfully realizing the mutual penetration and common development of culture, tourism and real estate plate.

Investment advice: buy-An investment rating. The company's stock literature and tourism projects, such as Yuzi Ancient Town and Tongguan Kiln in Changsha, have gradually matured, and projects such as Langzhong Ancient City, Xining Resort and Jinxiushan transfer in South Korea have progressed steadily, and the "literature and tourism + finance" business is expected to enter a continuous harvest period. It is estimated that the return net profit of the company from 2019 to 2021 is 1.37 billion yuan / 1.58 billion yuan / 1.79 billion yuan, the EPS is 0.83 shock 0.94 yuan, the PE is 5.8x/5.1x/4.5x, and the target price is 5.50 yuan for 6 months.

Risk tips: real estate market competition and policy uncertainty; culture and tourism project investment, long development cycle, climbing less than expected risk; macroeconomic risk.