Incidents: The company recently issued a number of announcements, including the capital increase of the holding subsidiary Zhiguang Energy to Sichuan Dianshi Energy Co., Ltd., and the details of the implementation plan for Zhiguang Electric's 2016 employee stock ownership plan. Zhiguang Energy, a holding subsidiary of the company, plans to use its own capital of 30 million yuan to jointly increase the capital of Dianshi Energy with Guiyang Jiaxiu Venture Capital Center and Lhasa Dashi Investment and Development Co., Ltd. After the capital increase is completed, the company will hold 3.06% of the shares in Yishi Energy. Investment points: Dianshi Energy is a leading company in the field of energy saving services, and the capital increase cooperation is in line with the company's strategic plan. The target company, Dianshi Energy, is the first batch of professional energy-saving service companies approved by the state. It has three major businesses: contract energy management, central heating, and distributed energy stations. Ranked 10th in the 2016 list of China's top 100 energy-saving service industries. This capital increase in Dianshi Energy is conducive to the two sides making full use of business synergy, enhancing the company's overall competitiveness in the field of energy saving services, and is in line with the company's development strategy. The details of the implementation plan for the 2016 employee stock ownership plan were issued, and shared interests to enhance the competitiveness of enterprises. The total amount of equity in the current employee stock ownership plan design does not exceed 10.5263% of the company's registered capital after the capital increase. This shareholding plan is conducive to enhancing the cohesion and sense of responsibility of the company's core management team and key employees, enhancing the business synergy between the company and holding subsidiaries, and achieving the sustainable development of the company. Set up power sales companies to lay out the electricity trading market, and acquire engineering design companies to extend the industrial chain. In response to the rapid progress of electricity reform in Guangxi, the company has already laid out electricity service companies, industrial parks, and electricity sales companies in Guangxi. It is expected that the user resources accumulated by the electricity service company established in 2015 will be directly converted into users of the electricity sales company. The company has a strong accumulation in power control equipment, power cables, comprehensive energy saving services and electricity consumption services. It has acquired 60% of the shares of Guangzhou Huayue Electric Power Engineering Design Co., Ltd. In the future, it is hoped that it will seize the historical opportunity of the distribution network to liberalize PPP pilots, achieve natural extension of the industrial chain, and enhance overall profitability and competitiveness. Profit forecast and valuation: We maintain the company's profit forecast unchanged. It is estimated that the company's net profit for 2016-2018 will be 171 million yuan, 245 million yuan and 317 million yuan respectively. The corresponding EPS is 0.43 yuan/share, 0.62 yuan/share, and 0.81 yuan/share, respectively. The PE corresponding to the company's current stock price is 53 times, 37 times and 28 times, respectively. Keep the “Overweight” rating unchanged.