Incident The company released its 2017 quarterly report on April 25, 2017. The company released its 2017 quarterly report. In the first quarter of 2017, the company achieved operating income of 96.31 million yuan, an increase of 32.24% over the previous year; net profit to mother of 650,000 yuan, a year-on-year decrease of 110.54%. The increase in expenses during the short review period affected performance. In the first quarter of 2017, the company achieved operating income of 96.31 million yuan, an increase of 32.24% over the previous year; realized net profit to mother of 650,000 yuan, a year-on-year decrease of 110.54%. The year-on-year increase in revenue was mainly due to the increase in revenue scale due to the combination of the Sitong environment. The decline in net profit attributable to mother was mainly due to increased administrative and financial expenses. Among them, in the first quarter of 2017, the company incurred management expenses of 21.13 million yuan, an increase of 58.75% over the same period last year, mainly due to the combined effects of factors such as the acquisition of the Sitong environment, the company's increased talent reserves, and increased depreciation of construction projects; financial expenses of 3.1 million yuan were incurred during the period, an increase of 1080.74% over the same period last year, mainly due to the acquisition of the Sitong environment. We believe that the decline in performance due to these reasons is temporary. In the long run, the consolidation of the Sitong environment will lead to an increase in the company's performance; in addition, when the Sitong environment enters the listed company, financing costs will be greatly reduced, and financial expenses are expected to drop rapidly. Actively develop the water environment treatment business and transform into a comprehensive water treatment service provider. During the reporting period, the company strived to overcome the adverse effects of the external economic environment such as “loss of production capacity” in the steel and coal industry and fierce market competition. While stabilizing the traditional business market, the company also actively developed business in the field of water environment treatment, especially the treatment of black and smelly water bodies. In the first quarter of 2017, the company added 3 new environmental franchise orders, including 2 BOO projects and 1 PPP project, with a total investment amount of 73.1 million yuan, opening up new ways for the company to expand its business. Up to now, the company has 22 franchise orders in operation, and 4 projects have entered the construction period. Major orders have been broken through, and PPP projects have good prospects. Since 2016, the company has received several major orders in the field of water treatment. 1) In July 2016, the company signed a framework agreement with the Guangdong-Gui Cooperative Special Pilot Zone (Zhaoqing) to build a 30,000 tons/day industrial sewage treatment plant and a 3.5-105,000 ton/day water plant, with a total future investment of about 4 billion yuan. 2) In August 2016, the company signed the “Yanjiao High-tech Zone Municipal Administration Black and Smelly Water Comprehensive Treatment Service Project Technical Operation Service Contract” with a total amount of 107 million yuan. 3) In September 2016, the company and the Beijing Pinggu District Water Authority signed the “Investment Agreement between the Government and Social Capital Cooperation (PPP) Project” with a total investment of about 13.847,400 yuan. As of the end of March 2017, the project had completed the full investment amount. 4) In April 2017, the company signed a “Strategic Cooperation Agreement” with the Linwu County People's Government in Hunan Province. The two sides plan to establish a comprehensive and in-depth strategic partnership in the fields of cooperation in urban water systems, environmental monitoring, treatment of black and smelly water bodies, watershed remediation, sponge city construction, and other infrastructure fields, with a cooperation amount of about 2 billion dollars. The continued implementation of PPP projects will provide strong support for the company's performance growth. The restricted stock incentive plan was introduced to establish confidence for future growth. On March 26, 2017, the company released the 2017 restricted stock incentive plan (draft). The incentive plan is to grant 5.255 million restricted shares at an award price of 13.99 yuan/share, accounting for 2.831% of the company's total share capital on the day the draft incentive plan was announced. The total number of incentive recipients granted for the first time in this incentive plan was 164, including 6 directors and senior managers working for the company, 28 core managers, and 130 core technical (business) personnel, covering a wide range of areas. The incentive targets focus on the core management, technical, and business personnel of the enterprise, which reflects the importance the company attaches to mid-level core cadres. It can effectively combine shareholders' interests, company interests, and the individual interests of the core team, help the company form cohesion, and enable all parties to focus on the long-term development of the company. According to the plan, for restricted stocks granted for the first time, the unlocking conditions are based on 2016, with net profit growth rates of not less than 30%, 70%, and 110% respectively; for reserved restricted stocks, the unlocking conditions are based on 2016, with net profit growth rates of not less than 70% and 110% respectively in 2018-2019. The above goals portray clear prospects for the company's development, reflect the company's confidence in performance, and will accelerate the release of the company's performance. On April 14, 2017, the above equity incentive plan (draft) was reviewed and approved by a special resolution by the Extraordinary General Meeting of Shareholders. Through continuous epitaxial mergers and acquisitions, the rating company has formed an entire “upstream equipment production - water treatment operation - sludge treatment” industry chain, and is actively developing business in the water treatment field. With the introduction of the “River Chief System” top-level design and increased attention paid by governments at all levels to watershed management, the company's scale of treatment of black and smelly water bodies is expected to continue to expand, and it is expected to obtain more opportunities in sponge cities, watershed management, and PPP projects. Recently, the restricted stock incentive plan (draft) was introduced and approved by the shareholders' meeting, demonstrating the company's confidence in future development. It is expected to achieve net profit of 1.32 billion yuan and 176 million yuan in 2017 and 2018, respectively, equivalent to EPS of 0.71 and 0.95 yuan, giving an increase in holdings ratings.