Incident: 1) On October 28, the chairman of the board submitted an interim bill. In order to avoid a malicious takeover, the company plans to revise some provisions of the “Articles of Association” (management compensation, conditions for changes in the board of directors, etc.). 2) On November 3, three shareholders, Qiu Guoqiang (8.6% shareholding ratio), submitted an interim proposal to remove Luo Xiangbo and Luo Honghua from the board of directors and nominate Qiu Guoqiang and Zhang Yu as additional directors. 3) On November 14, a resolution of the second Extraordinary General Meeting of Shareholders in 2016 was held, and the bill to amend the company's articles of association was not passed; the bill to remove Luo Xiangbo and Luo Honghua from the board of directors and nominate Qiu Guoqiang and Zhang Yu as additional directors passed. Our comments on this are as follows: the chairman of the board has been removed, and Mr. Qiu, who has a background in private equity, has joined the board of directors. Small and medium shareholders may benefit. 1) The chairman has been removed, and the new directors have private equity backgrounds: Luo Xiangbo and Luo Honghua currently hold 17.3% of the shares and are the largest shareholders and actual controllers of the company. Among them, Luo Xiangbo is the former chairman of the company. One of the new directors, Qiu Guoqiang, was the former vice chairman, deputy general manager, and sales director of Sanwei Silk, and is currently the chairman of Zhonglong Hangchuan Investment Fund. Zhonglong Hangchuan currently manages a fund size of 6 billion yuan. The investment fields of its funds include mining, energy, and new energy industries. Zhang Yu, the second new director, is currently the deputy general manager of Shanghai Yonghua Investment Management Department and Director Wan Lishi. Shanghai Yonghua is a subsidiary of Yongjin Group, with a cumulative investment scale of over 6 billion yuan; it has successively invested in more than 80 outstanding enterprises, of which more than 40 have been successfully listed. 2) Prompt transactional opportunities in the short term and benefit the interests of small to medium shareholders in the medium to long term: The current removal of directors is a sign of the disclosure of conflicts between shareholders in the past. Judging from the shareholder structure, the actual controllers Luo Xiangbo and Luo Honghua currently hold 17.3% of the shares; the third shareholder, Qiu Guoqiang, holds 8.6% of the shares. As a result of voting at this shareholders' meeting, 129 million shares agreed (accounting for 32% of the total share capital) and 86 million shares opposed (accounting for 23% of the total share capital). We judge that this change in management, which is close to the shareholding ratio of multiple parties, suggests transactional opportunities in the short term; after the change in management structure, it may benefit the interests of small to medium shareholders in the medium to long term. Three-dimensional silk is a transformational company, with successive mergers and acquisitions to increase environmental protection. The company went public in 2010, and the headquarters specializes in bag-type dust removal filters; in 2014, it acquired Roca Environmental Protection and entered flue gas denitrification; and in 2015, it acquired Xiamen Poting to develop bulk materials transportation and storage business. We expect the company's net profit to reach 162 million yuan in 2016, of which the headquarters's bag dust removal business, Loca Environmental Protection, and Xiamen Poting contributed 0.15, 0.5, and 97 million yuan respectively. The first major 600 million yuan clean heating order was launched, and the establishment of a merger and acquisition fund accelerated expansion. 1) Clean heating order: In May 2016, the company announced the launch of a biomass thermal power project in Xixia County, Nanyang City, with a total investment of 600 million yuan and a first phase of 300 million yuan. Phase I will build a 150t/h heating boiler. The supporting generator set is a 24MW backpressure and condensing unit and corresponding pipe network; the second phase is 150t/h, supporting a 30MW generator set. In the future, the clean heating PPP project will be the company's key expansion area. 2) The establishment of M&A funds accelerates outreach: The company invested 120 million yuan to participate in the establishment of the 480 million yuan Huaxin-3D Silk Environmental M&A Fund, and invested 100 million yuan to participate in the establishment of the 400 million yuan 3D Silk-Anjie Investment Fund to accelerate outreach. Investment advice: Maintain an increase in holdings rating. Considering additional distribution and publication, we predict that the net profit of 3D Silk in 16-17 will reach 17/220 million yuan; the current market value for exam preparation has reached 8.2 billion yuan. Xiamen Poting has more than 1 billion orders in hand, and its performance may have exceeded expectations. The chairman of the board was removed, and Mr. Qiu, who has a background in private equity, joined the board of directors, and small to medium shareholders may benefit. Currently, the company's stock price is 20.55 yuan/share, which is close to the ancillary financing price of 17.71 yuan/share and the increase in shareholders' holdings of 19.21 yuan/share. The current price security is strong. Based on this, maintain an increase in holdings rating. Risk warning: dust filter business falls short of expectations