The company adjusted the private fundraising plan The company issued a notice on July 13 to adjust the private fundraising plan. 1) The total amount of capital raised has basically been maintained, with no more than 4.872 billion dollars before the adjustment and no more than 4.856 billion dollars after the adjustment; 2) the original issuers were reshuffled. After the adjustment, current distribution targets include Huarongtai (no less than 1.8 billion), Tongfang Innovation (no more than 700 million), and Linzhi Qingchuang (no more than 200 million). The three are concerted actors, and their shares have increased to 55.6% of the total, showing confidence in capital investment; 3) Other issuers have no more than 7 seats, and their shares have been reduced, and the lockdown period has been reduced to stimulate participation; 4) The funds are being invested in the sea. The foundation of PPP construction in Miancheng Above, smart drainage system construction projects and soil restoration projects have been added; 5) The issue price was adjusted from 8.12 yuan/share to no less than 90% of the average price for the first 20 trading days of the pricing benchmark. The government must do to adjust the company's investment in the sponge city direction according to market progress. The progress is lower than expected, mainly due to the lack of supporting policies, and the government is resolving the obstacles one by one. The company acquired the layout plan of the Clean and Control Human Settlements Research Institute and recently won the bid for the Qian'an Sponge City Construction PPP project, breaking the impasse and proving that the company's idea of “starting with planning and bringing in construction projects” is feasible, and then increasing capital to strengthen project construction capabilities in the Central Century. Starting with the 2015 report, the company has adjusted the direction of key projects in Sponge City. The current fundraising was changed from “Qian'an, Pingxiang, Gui'an New Area, Chizhou” to “Qian'an, Pingxiang, and Suining”, which is in line with our expectations. Currently, only the Qian'an project has been determined. The company also actively participated in the selection of the second batch of sponge city pilot projects, expanded the scope of cooperation projects, and created favorable conditions for continuing to win bids for sponge city projects in the future. While smart drainage system construction projects create profit advantages, collaborative companies plan to invest 1,107 billion dollars in the direction of smart drainage systems to achieve project sales and profits through sales of software and hardware products, specialized consulting and technical services, preparation of relevant plans and plans, facility operation, or PPP project construction, etc. The company will combine the construction of the sponge city PPP project that has won the bid to simultaneously promote smart drainage systems, with a certain degree of synergy. It is estimated that the construction period is 3 years and the promotion period is 2 years. The average annual revenue (excluding tax) for 10 years after construction is completed (excluding tax) is 1,394 million yuan, and the average annual net profit that can be realized within 10 years is 208 million yuan. Soil restoration projects have been added, and emerging market companies plan to use 498 million yuan to build 5 testing laboratories and 10 offices, and invest 101 million dollars in soil restoration business. The construction period is 2 years. The average annual revenue (excluding tax) for 10 years after construction is completed is 572 million yuan, and the average annual net profit that can be realized within 10 years is 80 million yuan. Huakong SEG revised the private fundraising plan to improve enforceability, maintain the “buy” rating company's revision of the private fundraising plan, and increase the overall enforceability of the plan. In terms of sponge city core business, the company can further promote the implementation of the Qian'an project and play a demonstration role, which is conducive to further winning the bid for the sponge city project. The fundraising also promoted the company's smart drainage system and soil restoration businesses, bringing new growth points. We maintain a “buy” rating for Huakong SEG. The 2016-2018 EPS is expected to be 0.12/0.37/0.42 yuan. Risk warning: Policy progress falls short of expectations; industry competition is intensifying.