For the first time, coverage was given an “increase in holdings” rating, with a target price of 18.04 yuan. The market does not know enough about the company's strategic position in China Power Investment. As China Power Investment's only listing platform in the Beijing-Tianjin-Hebei and Bohai Rim regions, the company will greatly benefit from the acceleration of mixed reforms in the power industry. The company's net profit for 16-18 is estimated to be 450/5.92/748 million yuan, corresponding to EPS of 0.82/1.07/1.36 yuan, respectively. Combining the DCF valuation and PE valuation, the company was given a target price of 18.04 yuan, corresponding to PE17X in '17, which is lower than the average PE of 19X in the industry, covering the “increased holdings” rating for the first time. The mixed reform will accelerate the securitization of the group's assets. Three major clues indicate that the company's asset injection is approaching: at the end of 2016, the central government proposed that the mixed reform of state-owned enterprises should take steps in seven major fields, including electricity, oil, natural gas, railways, civil aviation, telecommunications, and military industry. In the last three months, the Railway Corporation, China Ordnance Industry Group, and the State Grid have frequently expressed their determination for mixed reform. We believe that the acceleration of the current wave of mixed reforms will advance the asset securitization process of the China Power Investment Group. However, the three major clues indicate that the company will usher in asset injections in the future and can be expected: ① In 2016, China Power Investment Group achieved a net profit of 8.76 billion yuan, ranking first among the five major groups. But on the other hand, the group's asset securitization rate is only 30%, which is the lowest among the five major power generation groups (the remaining four companies all exceed 40%). ② Recently, China Electric Power New Energy, China Electric Power, Shanghai Electric Power and other targets under the Group have received substantial progress in asset injection one by one; ③ Recently, the Group has frequently voiced asset listing as a priority task in 2017. The company is positioned as a new energy integration platform for “Beijing-Tianjin-Hebei” and “Bohai Rim” in the group: the company is the only listing platform for China Power Investment in the “Beijing-Tianjin-Hebei” and “Bohai Rim” regions. According to China Power Investment's “regionalization+specialization” asset integration concept, the company is likely to become the group's clean energy asset integration platform in North China and surrounding regions. We estimate that the current 400MW photovoltaic and 150MW wind power production capacity built by the Group in Hebei Province can be integrated. Furthermore, according to our incomplete statistics, the installed capacity of the State Power Investment Corporation's new energy assets in the Beijing-Tianjin-Hebei and Bohai Rim regions exceeds 2,300 MW, and project reserves exceed 5,000 MW. These potential resources are likely to become integrated targets in further asset securitization processes. Catalysts: The Hebei Company's asset consolidation plan was introduced, and the State Power Investment's mixed reform plan rules were introduced. Core risk: The asset consolidation progress of China Power Investment Corporation in Hebei has not met expectations.