The incident described Shengli Co., Ltd. released its 2015 annual report. During the reporting period, the company achieved operating income of 2,509 billion yuan, a year-on-year decrease of 12.63%, a year-on-year net profit of 287.394 million yuan, a year-on-year decrease of 21.70%, and basic earnings per share; during the reporting period, the company achieved revenue of 601 million yuan, a year-on-year decrease of 14.18%, and net profit of 53.691 million yuan (including net profit from the sale of Luyu Trading), an increase of 557.13% over the previous year. 0.07 yuan Incident review The natural gas business continues to gain strength, and the transformation is beginning to bear fruit. The company's 2015 performance declined 21.70% year-on-year, mainly because the company's traditional business was affected by continued economic bottoming out, and revenue and gross margin declined significantly (① refined oil trading business: revenue fell 53.73%, gross margin was only 0.08%; ② agrochemical business: revenue fell 23.68%, gross margin was only 2.01%); on the other hand, the company's clean energy and gas business increased sharply by 149.59%, and gross margin was 20.89%, making it the company's largest industry for the first time. At the same time, the company's 2016 quarterly report shows that natural gas maintained a rapid development trend, with revenue growing 200% year on year. The scale effect (high gross profit) brought about by the growth of the natural gas business was gradually realized in terms of performance. The strategic transformation was beginning to bear fruit, and the company gradually entered the performance delivery period. It is expected that in the future, traditional inefficient assets will be further divested (the agrochemical industry will be divested at the end of 2016, and other industries will be divested at the end of 2017), and the company will gradually become a pure clean energy service provider. Epitaxial acquisition+content development, two-wheel drive creates a new gas brand. The company began to transform the natural gas industry in 2012, and began divesting the non-clean energy industry with low gross margin (divesting the biological industry at the end of '13), with the goal of building a comprehensive clean energy service provider. During the reporting period, the company achieved a two-wheel drive transformation of “epitaxial acquisition+content development” in the natural gas business: (1) epitaxial acquisition: mergers and acquisitions aimed at urban gas franchises, and realized project cooperation in the four regions of Boyuan Natural Gas (Puyang), Shengli Shunda (Bazhou), Yimin Industrial (Dalian Zhuanghe), and Yimin Gas (Dalian Pulandian); (2) Content Development: Active construction of natural gas terminal projects. Since the “One Participation, One Control and Double 100 Station Plan” was decided in 2013, the company has participated in the operation of the gas (gas) (gas)) The station has reached more than 150 seats. Actively explore emerging businesses, and distributed energy becomes the next breakthrough point. The company vigorously lays out distributed natural gas to build an energy supply microgrid. After experiencing the “first year of natural gas distributed energy”, the field will enter a period of high growth. The company has two major advantages in natural gas distributed energy projects: (1) Low-cost gas source advantages: ① traditional gas sources supplied by CNPC, Sinopec, etc.; ② gas source supply systems such as imported LNG and biomass natural gas and clean gas; (2) Industrial chain advantages: The company has a nationwide gas supply franchise and grafted natural gas distributed energy, which can achieve the full benefits of the entire industrial chain, and help the company successfully open up the upstream and downstream industrial chains. Profit forecast and valuation: We expect the company's EPS in 2016-2018 to be 0.32, 0.48, and 0.54, respectively, and the corresponding PE will be 21x, 14x, and 12x respectively, maintaining a “buy” rating! Risk warning: The government's distributed energy policy is less than expected, and the company's epitaxial integration is lower than expected;