The incident describes the Jinzhou Pipeline tracking report. Incident review Oil and gas continued to be sluggish, and profits hit a new low since 2008: the company's main products include galvanized steel pipes, spiral welded pipes, and steel-plastic composite pipes, etc., which are widely used downstream in oil and gas transportation and drainage. Although oil and gas prices picked up in 2016, it may be due to the relative lag in the recovery of oil and gas pipeline investment. Fixed asset investment in the oil and gas extraction industry fell sharply by 31.90% year-on-year in 2016, which fully confirms that demand for oil and gas pipeline terminals has yet to pick up substantially. Due to low oil and gas demand and large losses from the joint venture CNOOC Jinzhou Pipeline, the company's profit deteriorated significantly in 2016. Net profit attributable to shareholders of listed companies for the whole year was only 60 million yuan, a sharp drop of 37.02% over the previous year, and the performance hit a new low since 2008. Controller changes catalyze long-term transformation expectations: The company recently changed the actual controller, and later sought targets that meet the company's development targets to improve asset quality. Adjusting the company's main business within the next year all highlighted the company's long-term transformation expectations. Specifically, Jinzhou Group, the company's original controlling shareholder, has continued to reduce its holdings since 2013. On April 7, 2017, Jinzhou Group transferred its 47.0157 million shares (9.03% share capital ratio) to Khorgos Wanmulong Investment Company. At the same time, some directors and executives of the company transferred 5.748,800 shares (1.11% of the share capital) to Wanmulong Investment. At this point, Wan Mulong Investment became the major shareholders of the listed company. Sun Jinfeng, Feng Kun, and Qiao Li Si became the actual controllers of the company. In addition, the company terminated the asset restructuring plan for the acquisition of warship-related businesses. Early plans to acquire assets related to overall ship construction, marine equipment manufacturing, ship system assembly, and technical support for ship equipment in service, etc., so as to expand the business into military ship manufacturing. Although the company recently terminated this major asset restructuring, the possibility of continuing transformation and restructuring in the medium to long term is not ruled out in the future. Overall, under the weak trend of the traditional main business, the company changed the actual controller and terminated the early asset restructuring plan at the same time. The areas of later transformation are quite broad, thus helping to boost the company's upward valuation space. The company's EPS is expected to be 0.12 yuan and 0.17 yuan respectively in 2016 and 2017, maintaining a “buy” rating.