The restructuring was completed and transformed into an urban water supply enterprise. On November 22, 2013, the major asset restructuring was approved, and the company will replace 100% of Binhai Sea Industry's shares with all assets and liabilities. Binhai Water Industry is a multi-quality water supply enterprise and integrated water service company under the Tianjin Water Authority. It is responsible for raw water supply in the Binhai New Area and the area north of Yongding Xinhe River. The company currently has 7 holding subsidiaries, managing 12 pumping stations, 2 regional water distribution centers, 4 water plants, operating and managing 10 raw water pipelines with a total length of more than 610 kilometers, a total water supply network length of 1,347 kilometers, and a total annual water supply capacity of about 607 million cubic meters. Key investment points: ① The government has designated prohibited mining zones to control ground subsidence, which has led to a decline in the supply capacity of groundwater sources year by year. External water transfer has become the main method for balanced water supply, and the proportion of external water transfer is expected to continue to increase, which is beneficial to the company's performance. ② The Tianjin Municipal Water Authority has clearly defined the Binhai Water Industry as supplying water to the area north of the Yongding River and Yongding New River in Tianjin and the Binhai New Area, and the operating period has been extended to 2042, so the company's business has a foundation for continuous growth. ③ Since 2012, the company has won a total of 800 million yuan in BT projects, built 3 sewage treatment plants and the Tianjin Eco-City River Landscape Water Project through the BOT model. Projects over the next two years will gradually contribute revenue. ④ The “National Water Pollution Prevention and Control Action Plan” is expected to be launched within this year, raising industry expectations. The water pollution problem in Tianjin is serious. In 2012, the city's rivers and class V rivers accounted for 74.2%. The sewage treatment market will remain prosperous in the future. In 2014, 23 new sewage treatment plants are planned to be built and expanded, and the company's sewage treatment business is expected to develop rapidly. Profit forecast and investment rating: The annual growth of raw water supply has been around 10% in the past few years. Considering the future contraction of groundwater supply in Tianjin and a further increase in the proportion of external water transfers, we expect the company's 2013-2015 EPS to be 0.62 yuan, 0.85 yuan, and 1.23 yuan respectively, corresponding to the closing price of 18.53 on February 24, 2014. The price-earnings ratio is 29.86X, 21.72X, and 15.04X respectively. The relative valuation is lower than the median value of the industry. Considering the company's resource advantages and future development space, we gave a “buy” rating for the first time. Risk Warning: Water Price Adjustment Risks, Project Progress Does Not Meet Expectations