Key investment points 1. The logic of municipal service outsourcers is gradually being confirmed. Winning the bid for the 4.4 billion municipal project is only the beginning. This time, the consortium formed by Senyuan Co., Ltd. and Jilin Municipal Construction Group Co., Ltd. won the bid for the Jilin underground integrated pipe gallery government and social capital cooperation (PPP) project [Jiangnan and Eastern Regional Pipeline Construction Project Section 1]. The final project price: 4,443,118,804 yuan, project period: N+25 years. Project Overview: Construction content includes responsibility for investment, construction, operation and maintenance of pipe gallery projects within the scope of construction. In previous in-depth reports and reviews, we have repeatedly emphasized that the model for Senyuan Co., Ltd. to establish a joint venture through PPP has entered the 2.0 era. The company's business scope will expand from a single road maintenance to the entire municipal service outsourcing, sharing the trillion-dollar municipal market. This time, we won the bid for 4.443 billion municipal projects using the model of forming a consortium with Jilin Municipal Construction Group Co., Ltd., which once again confirms the logic of our company's transformation into an entire municipal service outsourcer. We believe that the current municipal PPP project in Jilin City is just the beginning. In the future, we will continue to replicate the model of establishing a municipal service outsourcing joint venture through PPP, covering municipal business in all provinces of the country starting from Jilin City, and finally sharing the trillion-dollar municipal service outsourcing market in the country! 2. Reiterate once again the investment logic of Senyuan Co., Ltd. The current market capitalization is only 5.2 billion, and is expected to exceed 10 billion dollars in the future: Senyuan Co., Ltd. is the leader in road maintenance equipment, and has established a joint venture through the PPP model for 2 years. This year, the model has been upgraded again, expanding from a single road maintenance to the outsourcing of entire municipal services. Senyuan is also deploying military and 3D printing, which is expected to contribute new performance growth points to the 20 billion road maintenance equipment market: Senyuan Co., Ltd. is a leading enterprise in the domestic new highway maintenance machinery industry and an industry standard setter; by the end of 2010, the company's market share of large-scale asphalt pavement local recycling equipment reached 40%. Road maintenance service market of 200 billion dollars: Since 2014, Senyuan began a transformation, from equipment manufacturing to maintenance layout, with an annual investment of more than 200 billion dollars in road maintenance services. The company has now established 18 joint ventures, with a target of 30 for the end of the year and 100 for 2018. As the current company gradually matures, the net profit of a single company is expected to exceed 10 million a year. Currently, the average shareholding ratio of Senyuan's joint ventures is 30% to 40%, and it is expected that high-quality companies will be held in the future. Municipal service outsourcing trillion market: The company signed a strategic cooperation framework agreement with Enlightenment Sand, and the joint venture model has been upgraded once again. The joint venture model has entered the 2.0 era, which is expected to expand the scope of business from a single road maintenance to the entire municipal service outsourcing, sharing the trillion-dollar municipal market. Military industry: Senyuan Co., Ltd. has become a first-level supplier to the military in terms of new road maintenance machinery. The company's large-scale heat regeneration units, road surface snow removal and cleaning equipment and other products are included in military procurement, and can join the entire military supply system. The company will also participate in the rapid manufacture of components such as ship propellers using sand laser 3D printing technology. The development of the military market is another new growth point for the company's business performance. 3D printing: Senyuan began laying out the 3D printing industry chain in 2014. Currently, the company is applying for military secrecy qualifications. The company's 3D printing support for key naval projects has huge potential and is expected to become the next Wang Huaming team (J-20 support). 3. Profit forecast. It is estimated that the company's performance in 16-18 is 138 million yuan, 192 million yuan, and 283 million yuan. EPS is 0.51, 0.71, and 1.05, and PE corresponds to 38X, 27X, and 18X, maintaining a highly recommended rating. 4. Risk warning. The number of joint ventures established fell short of expectations, and the progress of PPP projects fell short of expectations