Incident: The company announced on the 25th that it plans to issue no more than 274 million shares (Zhu Yongjun's 26 million shares, Jiang Zhaobai 248 million shares) to Chairman Zhu Yongjun and Chairman Jiang Zhaobai of China, the largest shareholder, at a reserve price of 4.01 yuan. The capital raised is approximately 1.1 billion yuan to supplement working capital and as start-up capital for future mergers and acquisitions. The above share sales limit period is three years; increasing holdings rationalizes the interests of management and shareholders and highlights management confidence. The chairman of the company has not held shares in the company before; if the issuance is completed, he will hold 1.5% of the company's shares. Jiang Zhaobai, chairman of Runzhong International, the company's former largest shareholder, will hold 14.3% of the company's shares and maintain its status as the largest shareholder. We believe that through this increase, the interests of the company's management and actual controllers will converge with the interests of shareholders. Zhu Yongjun and Jiang Zhaobai subscribed to issue shares at a cost of 1.1 billion yuan, which also shows the confidence of management and actual controllers in the future development of the company; it is expected that the results of developing the water market in small rural towns will gradually become apparent. The company signed a rural water framework agreement with the Shandong Provincial Housing and Construction Department in early 2014, but there are no specific projects to advance progress. We estimate that this period will be a period of specific project negotiations and market expansion. Referring to the “21st Century Network” report, the company has made progress in several provinces and regions, and will continue to be deeply involved in the field of rural water treatment in the future (http://money.21cbh.com/2014/7-7/0MMDA2NzZfMTIyMzU0Mg.html); profit forecasting and investment suggestions. Considering that the progress of water services in rural Shandong is lower than previously expected, the company expects the 2014-2016 EPS to be 0.17 (down 26%), 0.31, 0.39 yuan, and the target price is 6.90 yuan, maintaining the “gain” rating; risk factors. Rural water promotion is progressing slowly, and revenue from leachate and industrial wastewater falls short of expectations.