Event: the company issued a preliminary plan for issuing shares and paying cash to purchase assets and raise supporting funds (revised version) and a resumption of trading announcement on the evening of October 21. The company intends to issue 251 million shares and 25.54 million shares respectively to creditors of Jiangxi Saiwei and Xinyu Saiwei in the form of shares, respectively. In addition, the company will issue 270 million shares to five institutions, including China Pingdingcoal Shenma Group, to raise matching funds of 2.05 billion yuan. The issue price of the newly added shares is 7.59 yuan per share. The company's non-public offering plan has been approved by the board of directors, and the follow-up needs to be examined and approved by the shareholders' meeting and submitted to the China Securities Regulatory Commission for approval.

The company will lay out three major industries in the future. As one of the leading suppliers of photovoltaic crystal silicon cutting materials in China, the company has a significant market advantage in the recycling of silicon carbide new sand and waste mortar, and has a leading market share. In the future, the company will take the photovoltaic industry chain as the main industry, and make efforts to lay out the three major industries of new materials, new energy, energy saving and environmental protection. In the field of new energy, through the merger and acquisition of Jiangxi Saiwei and Xinyu Saiwei, the company expands its business scope to the lower reaches of the industrial chain, realizes the coordinated and coordinated development of various businesses in the photovoltaic industry chain, and quickly enters the photovoltaic industry to effectively broaden the source of profit. In the field of new materials, the company has solved the production technology of artificial graphite materials and laid out the production project of carbon-graphite anode materials for lithium-ion batteries by making use of the advantages of technology and resources in the coal industry of Pingdingshan Shenma Group; in the field of environmental protection, at present, the company's wholly-owned subsidiary Kaifeng Xinghua has contracted the relevant sewage treatment business of the controlling shareholder of the company, extending the business to the field of sewage treatment and recycling technology. With the help of the above three major businesses, the company is expected to achieve sustained growth in the future.

Reorganize Saiwei and quickly cut into the core areas of the photovoltaic industry. Yi Cheng Xinneng has always been a domestic supplier of photovoltaic crystal silicon cutting materials and plays a supporting role in the photovoltaic industry. Through this acquisition of Jiangxi Saiwei Xinyu Saiwei, the company's industrial chain has been extended to the field of polysilicon. At present, Jiangxi Saiwei still retains a complete market channel and establishes stable business contacts with all large customers. At the same time, Jiangxi Saiwei has the only national photovoltaic research institute in China's photovoltaic industry, which has accumulated through many years of operation. the number of authorized patents has reached 134, and the company has outstanding technical and market advantages. Jiangxi Saiwei Xinyu Saiwei through this bankruptcy restructuring, its debt burden will be greatly reduced, will help Yi Chengxin quickly cut into the core areas of the photovoltaic industry.

The turning point in the industry is coming, and the company is expected to achieve "corner overtaking". Jiangxi Saiwei is one of the earliest enterprises engaged in the research and production of solar polysilicon wafer technology in China. at present, it has the polysilicon production capacity of 3.51GW, which is in the top three of the industry. With the further implementation of the photovoltaic price retrograde mechanism, although there will still be a phased demand peak in the short term, it will adversely affect the construction demand of photovoltaic power stations with the reduction of photovoltaic price and government subsidies. therefore, for the silicon wafer industry in the upstream of photovoltaic manufacturing, the core competition of the photovoltaic industry in the future will be lower production costs and higher conversion efficiency. We believe that Jiangxi Saiwei will eventually benefit fully from the reshuffle of this industry for the following reasons: first, Jiangxi Saiwei's latest independent research and development of "efficient polycrystalline M4 wafer" has a relatively obvious competitive advantage in the industry. The conversion efficiency of its battery modules can reach more than 18.5%, which is higher than the industry average. Second, mortar cutting technology is widely used in domestic polysilicon wafer production field, and electroplated diamond wire has significant cost advantages compared with mortar cutting technology, electroplated diamond wire cutting will eventually replace mortar cutting technology. After the completion of this asset reorganization, Jiangxi Saiwei will transform and upgrade the existing cutting process and introduce WEDM technology, while listed companies have been ahead of the industry in the advance layout of electroplated diamond line projects in order to meet the needs of market development and technology renewal. After this cooperation, Yi Chengxineng and Jiangxi Saiwei will better achieve business cooperation, improve the efficiency of wafer slicing, and reduce the unit production cost of wafers. Jiangxi Saiwei's wafer products will have the dual advantages of high efficiency and low price at the same time. and is expected to achieve "backwardness advantage, bend overtaking" in the photovoltaic industry.

Profit forecast: assuming this restructuring is successful, we expect the net profit of the owner of the parent company from 2016 to 2018 to be 6.79 million yuan, 294 million yuan and 660 million yuan respectively. According to the total equity of 1.049 billion shares after asset restructuring, the EPS is 0.01,0.28 and 0.63 yuan respectively. Corresponding to the latest closing price of 8.54 yuan, the price-to-earnings ratio is 1319 times, 30 times and 14 times respectively. In view of the stable income of the company's traditional main business, M & A Saiwei realizes the integration of the industrial chain to quickly enter the photovoltaic industry, and through its own advantages in the layout of energy storage industry and environmental protection industry, it is expected to achieve great-leap-forward development in the future. we upgrade the company's investment rating to "recommended".