On the evening of April 5, the company announced the termination of the fixed increase, and the company's overall impact on the company issued an announcement on the evening of April 5, saying that due to changes in the financing environment and the company's operating needs, it was decided to terminate the fixed increase that began in March last year. The original scheduled increase is intended to raise no more than 700 million yuan through the issue of no more than 80 million common shares, with a reserve price of 8.73 yuan. We believe that the termination of the fixed increase may be related to the more stringent time interval requirements of the new refinancing regulations on the fixed increase of listed companies, and the company has decided to terminate this fixed increase after comprehensive consideration of future financing needs. At present, the company has many financing channels, the pre-plan for non-public issuance of bonds was issued in early March, and the company is likely to meet the conditions for issuing convertible bonds in the future, so we believe that the termination of this increase will have a limited impact on the company as a whole.

The company's main business industry is prosperous, and the future high growth sustainable company released its 16-year performance at the end of February. The revenue in 2016 was 2.033 billion yuan, and the net profit of YoY+119.64%, was 390 million yuan. YoY+46.47%, meets our expectations. Since its backdoor listing in 2015, the company has achieved high growth for two consecutive years and exceeded its performance commitment. In recent years, with the acceleration of the construction of public spaces such as airports, stations and stadiums in China, the company's main business, the metal enclosure engineering industry, has maintained a high level. 12 newly signed metal roofing projects in 2016H1, 7 to be started, won the bid for the roofing project of Beijing New Airport in February 2017, with a contract value of 213 million yuan, more than 10% of the 16-year income. The winning bid for benchmarking projects has once again consolidated the company's leading position in the industry. Under the combined effect of the high prosperity of the industry and the company's leading edge, we believe that the company's high growth in the future is sustainable.

The light asset model helps the company to make high profits, the acquisition of Shanghai Zhongwei design advantage extends upstream, the company adopts the light asset operation mode, pays attention to the technical innovation specialized project management, does not set up its own production base, and the material processing and on-site construction personnel adopt the outsourcing mode. The outsourcing model has created a profit model for the company's technological efficiency, with ROE exceeding 40 per cent in the past two years, gross margin of each sub-business above 20 per cent, and net profit margin remaining at around 20 per cent, significantly ahead of competitors. It is difficult for the company to undertake the project, and the technical advantage has certain barriers in the industry. after the acquisition of 90% equity in Zhongwei Design, the design concept and design method of the company have been improved again, and the advantage of roof engineering design is expected to expand to the whole field of architectural design. The industrial chain is expected to extend upward.

The "Belt and Road Initiative" market has made a breakthrough, and the company is expected to undertake a number of World Expo construction projects in Kazakhstan in the first half of 16 years. In October, the company set up a Malaysian subsidiary in Shenzhen Sanyi Construction Co., Ltd. it has stepped up the promotion of projects in Southeast Asia and actively participated in the construction of a new city in Malaysia. We believe that the company's technological advantages will be more prominent in overseas projects, the World Expo project will have a positive effect on the company's overseas brand image, and the future growth of the company's overseas business is worth looking forward to.

The stock price repression factor is eliminated, the future high growth is expected, and the "buy" rating is maintained. at present, all the businesses of the company are developing healthily, and it is very likely that the company will continue to exceed its performance commitments in 17 years, and the high growth will continue in the future. The termination of the fixed increase has a limited impact on the company's financing, and the stock price has risen a lot after the announcement of the fixed increase plan. the termination of the fixed increase will help to eliminate the repressive factors of the short-term stock price. It is estimated that the company 2016-18 EPS0.52/0.69/0.88 yuan, CAGR35%, approved in 17 years 30-35 times PE, corresponding to the price range of 20.7-24.15 yuan, maintaining a "buy" rating.

Risk Tip: the company's projects are not advancing as expected, and the growth rate of investment in public facilities is declining.