Investment points: Investment recommendations: Assuming 2015-2017, the revenue growth rate of the company's raw water and tap water business is about 10%; the revenue growth rate of the sewage treatment sector is about 50% (low base). It is estimated that in 2015-2017, the company's operating income is 767, 845, and 932 million yuan, net profit is 0.49, 0.58, and 75 million yuan respectively, and EPS is 0.25, 0.30, and 0.39 yuan respectively (if the non-public stock offering plan is approved, the 2015-2017 EPS is expected to be 0.53, 0.70, and 0.90 yuan respectively). Considering the current level of performance of the company and the expected future use of the target company to be acquired to achieve rapid business transformation and enter the environmentally friendly PPP market, we believe that the company should enjoy a certain valuation premium, corresponding to the target price of 35 yuan, cover for the first time, and give it an “increase in ownership” rating; it plans to acquire Jiacheng Environmental Protection to expand its sewage and environmental management business. Jiacheng Environmental Protection covers the entire “one-stop” industry chain such as consulting, design, construction, and operation; it has complete professional qualifications and is in a leading position in the industry; Bohai Co., Ltd. is expected to achieve synergy with Jiacheng Environmental Protection; the company's market capitalization is small and flexible, and it is expected to benefit from the growth of the PPP environmental protection market in the future. Compared with ordinary private enterprises, local governments are more willing to cooperate with state-owned enterprises to launch PPP projects; once a company enters the PPP field, it is expected that it will be easier to obtain bank loans or strong support from financial institutions based on the platform advantages of listed companies and controlling shareholder resources. Combining Jiacheng Environmental's rich experience in operating models such as EPC, BT, and BOT, Bohai Co., Ltd. is expected to use the Jiacheng Environmental Protection Platform to intervene in the PPP blue ocean field. Among listed companies in the water sector, the market value of Bohai shares is relatively small, and there is a lot of flexibility to benefit from PPP projects in the future; risk factors. The speed and intensity of implementation of PPP in the country is lower than expected, and project progress has been slow or the government has defaulted; competition in the PPP market is fierce, and competition at low prices has caused high-quality projects to be left out.