Investment Highlights The company announced the 2016 Annual Report & 2017 Quarterly Report. In 2016, it achieved revenue of 2,638 billion yuan, a slight decrease of 0.14% over the previous year, and realized net profit of 62.8204 million yuan, a year-on-year decrease of 34%. At the same time, the company plans to distribute 0.4 yuan (tax included) for every 10 shares to all shareholders. 2017Q1 achieved revenue of 647 million yuan, a year-on-year increase of 44.63%, and achieved performance of 6.5687 million yuan, a year-on-year decrease of 47%. Demand for oil and gas pipeline terminals has yet to recover significantly, and investment losses & interest costs are dragging down performance. In 2016, although oil and gas prices picked up, there was still no clear transmission of pipeline demand at downstream terminals, and sales of the company's pipeline products only increased slightly by 1.38%. In addition, the shareholding company CNOOC Jinzhou lost 63.4539 million yuan, nearly double that of 2015. Shagang Jinzhou also continued to lose money, and the pipeline industry's fund-raising project production capacity was not yet fully utilized. At the same time, the increase in bank loans also brought in interest expenses of 23.4273 million yuan, which ultimately led to a significant decline in the company's annual performance. This year, Q1 was still hampered by investment losses and interest expenses, but the pipeline industry demolition compensation of 11.28 million yuan reversed the company's negative operating profit situation, and eventually achieved a net profit of 6.5687 million yuan to the mother. The performance of steel-plastic composite pipes has been remarkable, and major contracts have added impetus to this year's performance improvement. By product, the revenue and gross margin of steel-plastic composite pipe products with high gross margins both increased in 2016, driving the improvement of the product structure. Recently, CNOOC Jinzhou signed another major contract worth 280 million yuan, adding impetus to improving this year's performance. The controller changed, and the time for transformation and upgrading is right. Earlier, the company transferred 9.03% of the Group's shares to Khorgos Wanmulong Equity Investment Co., Ltd., and some directors and executives also transferred 25% of their shares. Although major asset restructuring has been terminated, expectations for transformation are strong, and subsequent transformation and development is worth looking forward to. The company's net profit for 2017-2019 is estimated to be 98 million yuan, 133 million yuan, and 190 million yuan, corresponding to the current PE of 53 times, 39 times, and 27 times, respectively, maintaining the company's “increase in wealth” rating. Risk warning: Demand recovery for oil and gas pipelines falls short of expectations, and transformation progress falls short of expectations.