Report highlights. A description of the event. The company announced its 2016 three-quarter report. Incident reviews. Performance is growing high, aluminum covers are steady, and gardens contribute incremental profits. In the first three quarters of 2016, Lipeng Co., Ltd. achieved operating income of 1,161 million yuan, a year-on-year increase of 30.81%, net profit attributable to shareholders of 91 million yuan, a year-on-year increase of 31.89%, and an EPS of 0.12 yuan. The main reason for the change in the company's profit is due to the large growth in the garden business in this period. In the future, the company will achieve the development of both anti-counterfeiting bottle caps and garden ecology. With the steady development of the traditional aluminum cap business brought about by the recovery of the wine industry, and the company's continuous increase in the garden industry, the company's future performance may usher in a breakthrough in its future performance. Net profit is expected to increase by 28.60% to 40.14% year on year this year, net profit for the fourth quarter to increase 24.21% to 51.17% year on year, and EPS for the whole year 0.20 to 0.22. Profitability remains stable, and the expansion of the garden business is dragging down cash flow. The company's gross profit margin for the first three quarters of 2016 was 20.23%, down 0.27% year on year; net profit margin was 7.88%, up 0.06% year on year; and period expense ratio was 8.68%, up 0.03% year on year, mainly due to the increase in the size of bank loans and corresponding high interest expenses due to the expansion of the company's garden business. The scale of revenue from the current period of the garden business expanded, and there were more progress payments and security deposits, resulting in operating cash flow of - 362 million yuan, a decrease of 131 million yuan from the same period last year - 231 million yuan; at the same time, the expansion of the garden scale increased the unsettled output value of construction, increasing current inventory by 512 million yuan over the same period last year. The company achieved operating income of 4.70, 3.61, 3.95, and 405 million yuan in Q4 last year and 405 million yuan respectively, with year-on-year increases of 85.85%, 42.83%, 7.80%, and 50.93%, respectively; net profit attributable to shareholders of listed companies was 0.52, 0.23, 0.33, and 0.35 billion yuan, respectively, up 297.46%, 58.54%, -7.70%, and 87.56% year-on-year. Due to the merger into gardens and the seasonal settlement characteristics of the garden industry, the company's performance grew rapidly, and revenue and profit in the fourth quarter contributed more to the annual results. With orders and financial guarantees, the garden business can be expected to grow in the future. The company is optimistic about the future development prospects of the garden industry and the opportunities of the garden industry brought by PPP, and entered the garden industry through the acquisition of Huayu. Huayu Garden has qualifications in landscape construction, landscape planning and design, and environmental pollution control. It is a full-industry chain landscaping and environmental management enterprise integrating landscaping, ecological restoration, environmental management, antique construction, and flower seedling production and marketing. Moreover, the company has a large market in the southwest region. Through the resources of listed companies in Shandong Province, it exerts good synergy with listed companies and explores the greening and environmental protection market in Shandong Province. Over the past 15 years, the company's garden business has greatly surpassed its original main business, and according to the interim report, the gross margin of the garden exceeds that of the original aluminum products business by 9.43%, making it the mainstay of the company's performance. The company is actively developing PPP business. Currently, it has been announced that 1,377 million PPP orders have been signed. The PPP model has the most obvious marginal improvement in the performance and cash flow of municipal gardens and ecological and environmental protection companies. In the future, as the country's policy on the PPP project model continues to increase, the company will use PPP to expand its business volume and further open up garden and environmental protection market space. Huayu promised to exceed its performance in 2014 and 2015, and promised to deduct non-return net profit of no less than 1.69 yuan and 198 million yuan this year and next year. It is expected that there will be little pressure on completion. This year, the company's fixed capital increase of 781 million yuan was approved, and 620 million yuan will be used for the company's ecological PPP projects. As the progress of ecological projects in place is accelerated, the performance of the garden ecology business is expected to be confirmed at an accelerated pace. The steady operation of aluminum bottle caps will benefit from consumption upgrades in the long run. The company is a leading domestic manufacturer of anti-counterfeiting bottle caps. It is the only domestic listed company for anti-counterfeiting bottle caps, and has the largest anti-counterfeiting bottle cap production base in Asia. Its main customers are second-tier and third-tier liquor companies. The company's traditional business will benefit from consumption upgrades. On the one hand, consumption upgrades will bring about a recovery in the wine industry, and the company's traditional business of anti-counterfeiting bottle caps will maintain steady growth over a long period of time; on the other hand, with the upgrading of consumption, public demand for anti-counterfeiting and anti-counterfeiting, the company's anti-counterfeiting bottle cap business will further expand into health wine, beer, pre-mixed wine, wine, pharmaceuticals, olive oil, and high-end drinking water. A fixed increase of 60 million for the QR code technology upgrade project for bottle caps will further enhance the added value of the product and enhance its core competitiveness. Investment suggestions: The forecast is that the company's 2016-2018 EPS is 0.21/0.27/0.34 yuan, corresponding to 2016-2018 PE of 41/32/26 times, respectively, and is rated as an increase in holdings. Risk warning: risk of economic fluctuations, risk of repayment of garden business, etc.