Event: Recently, the company announced the “2016 Semi-Annual Operating Data Announcement” and the “2016 Semi-Annual Performance Forecast Announcement”. Comment: The performance of the semi-annual report increased sharply, and the large expected return of debt was the main reason. According to preliminary estimates by the company's finance department, net profit attributable to shareholders of listed companies is expected to be about 150 million yuan to 175 million yuan in the first half of 2016, an increase of 300%-370% over the previous year. Net profit attributable to shareholders of listed companies: 37.088 million yuan. Earnings per share: 0.0689 yuan. The return to estimated debt of 12 million yuan is the main reason for the sharp increase in the company's performance. Among them, according to the relevant judgment and the bankruptcy ruling of Leshan Ledian Tianwei Silicon Technology Co., Ltd., the company transferred back its estimated debt of about 37 million yuan; the company sued Baoding Tianwei Baobian Electric Co., Ltd. and confirmed claims of 73.8 million yuan and interest in the final trial. Furthermore, the holding subsidiary Leshan Mojiang Coal and Electricity Co., Ltd. drastically reduced losses over the same period last year due to the completion of personnel placement and disposal of some assets, boosting performance. In 2014, Mojiang Coal and Power, a subsidiary of the company, lost 179 million yuan respectively. In 2015, the company accelerated the asset disposal and personnel placement process following the policy closure of the Mojiang Coal and Power Company. In 2015, the loss was drastically reduced to 41.9947 million yuan. The influence of Mojiang Coal and Power Company on the company's subsequent performance continued to weaken until it no longer dragged down the company's performance. The sales volume of the electricity, natural gas, and tap water businesses all increased to a certain extent. In the first half of 2016, the company's power generation capacity reached 276.31 million kilowatt-hours, a year-on-year increase of 69.58%, electricity sales of 1314.73 million kilowatt-hours, a year-on-year increase of 27.91%, gas sales of 63.4 million cubic meters, a year-on-year increase of 10.84%, and sales volume of 13.33 million cubic meters of water, an increase of 4.57% over the previous year. Among them, Qianwei County Zhengxin Investment Co., Ltd., a wholly-owned subsidiary (holding 100% of shares in Leshan Chuanqian Electric Power Co., Ltd.), was included in the scope of the company's consolidated statements in May 2015. From January to April 2016, Leshan Chuanqian Electric Power Co., Ltd. generated 3.68 million kilowatt-hours and sold 214.74 million kilowatt-hours of electricity. After deducting Chuanqian Electric Power, the company's power generation increased by 49.54% year on year. The installed capacity of the power plants owned and controlled by the company is 1079.35 million kilowatts (all hydropower plants, accounting for 19.89% of the total installed capacity of the power grid). This year, the water coming from Sichuan is relatively good, and the power generation capacity has increased dramatically. Furthermore, the company has integrated sales, and the number of hours used per year is high, so it is expected that its own power generation volume and total electricity sales volume will continue to grow. Electricity price adjustments have had a negative impact on the company's performance. The company's power grid suspended sales-side electricity prices (electricity users containing ion membrane chlor-alkali production), Internet-side thermal power supply peak valley electricity prices, and hydropower peak and valley electricity prices, starting with electricity volume monitoring in March 2016. Furthermore, the Chuanqian Electric Power Company, a wholly-owned subsidiary of the company, received the “Approval on Adjusting Electricity Prices in Fengjiao Peak Valley in Our County” from the Qianwei County Development and Reform Bureau. Starting from April 2016, Chuanqian Electric Power Company suspended sales-side electricity prices on the electricity volume; suspended feig-dry peak and valley electricity prices for coal-fired power on the Internet side and peak and valley electricity prices for hydropower; and fully implemented sale-side peak and valley electricity prices. It is estimated that this electricity price adjustment will reduce the company's 2016 electricity operating revenue (including Chuanqian Electric Power Company) by about 20 million yuan, which will adversely affect the company's performance. Maintain a “Recommended” rating. Regardless of factors such as increased distribution and dilution, we expect the company's EPS to be 0.267 yuan, 0.343 yuan, and 0.456 yuan respectively in 2016-2018, corresponding to 31.79 times, 24.78 times, and 18.64 times PE, respectively. The company's future performance will not be hampered by Ledian Tianwei and Mojiang Coal Power, there is plenty of room for spontaneous hydropower to replace purchased electricity, and the performance flexibility of participating in photothermal power plants has been high, so it has maintained its “recommended” rating. Risk warning: The risk of electricity sales prices falling short of expectations; power generation capacity falls short of expectations; progress of power plants of participating companies falls short of expectations; and the natural gas and tap water business is not progressing as expected.