Comprehensive layout of utilities and financial venture capital: The company is a utility investment and holding platform enterprise in the Yangtze River Delta region. The company comprehensively lays out the utility sector, and its business scope includes the three directions of urban gas, urban transportation, and municipal environment. At the same time, the company has been deeply involved in the field of financial venture capital for many years. The Shenzhen Innovation Investment and Chinese Cultural Industry Fund, in which it has participated, are benchmark enterprises in the field of financial venture capital. There is plenty of room for performance improvement in the gas sector: Shanghai Dazhong Gas's buying and selling gap is high. According to the H-share prospectus, Shanghai Dazhong Gas's purchase and sales gap in 2015 was as high as 10%, which is higher than the industry average. In the future, the company will reduce the gas purchase and sales gap by replacing smart meters and improve the performance of the gas sector. At the same time, the gas sector will also benefit from the increase in gas consumption in the Yangtze River Delta region and the reduction in gas purchase costs brought about by the increased level of gas marketization. Accelerated implementation of PPP adds impetus to the municipal environment sector: PPP projects are showing a trend of accelerated implementation. As of the end of September 2016, the Ministry of Finance had 232 PPP demonstration projects, with a total investment of 786.63 billion yuan, and an implementation rate of 58.2%. Municipality and the environment are key areas of PPP, and the future is expected to benefit from the acceleration of PPP projects. Financial venture capital has entered a good harvest period: the company has been deeply involved in the field of financial venture capital for many years, and its participation in the Shenzhen Innovation Investment Fund and the Chinese Cultural Industry Fund are industry leaders. As IPOs accelerate and the country's incentive policies for the venture capital industry continue to increase, financial venture capital is expected to usher in a good harvest period. Hong Kong stock IPO listing, strong extension expectations: According to the company's announcement, 479 million H shares issued by the company were listed on December 5, 2016, with an issue price of HK$3.60 per share, raising a total of HK$1,724 million, or approximately RMB 1.53 billion. The use of capital raised is mainly focused on expanding the company's utility business, including investment and expansion of sewage, gas, and utility infrastructure, and extended mergers and acquisitions. The company has abundant capital and strong expansion expectations. Investment advice: The company is a regional utility leader, the financial venture capital business is worth looking forward to, and the expansion expectations are strong. We expect the company's EPS from 2016 to 2018 to be 0.2 yuan, 0.28 yuan, and 0.38 yuan respectively, and the corresponding PE is 30.8 times, 22.3 times, and 16.4 times, giving a “buy-A” investment rating, and a target price of 8.5 yuan for 6 months. Risk warning: The company's business development falls short of expectations; risk of fluctuations in financial venture capital business performance.