Key investment events: In 2016, the company achieved operating income of 1,050 million yuan, a year-on-year decrease of 22.74%; realized net profit of 131 million yuan, a year-on-year decrease of 18.87%. The main reasons are: 1) Some of the EPC revenue plans in 2016 did not fully meet the revenue recognition criteria and will be extended to 2017; 2) Oil prices continued to be sluggish in 2016, some major overseas projects tracked by the company progressed slowly, and new orders failed to effectively fill the revenue gap. 2017 Business Plan: In 2017, the company's business goals are to achieve operating income of 2 billion yuan and net profit attributable to owners of the parent company of 350 million yuan. Company strategy: EPC is the core, internationalization, integration and environmental protection second main business. With petroleum and petrochemical EPC as its core business, it will vigorously develop environmental protection business, integrated turnkey business for oil and gas field development, and cultivate potential businesses such as oil and gas pipeline integrity management services. Establish complete integrated service capabilities for oil and gas field development through cooperation with highly complementary service companies such as Anton Group. After the production limit agreement, the company's participation in bidding and workload increased. In 2016, new orders of 679 million yuan were signed, a year-on-year decrease of 55.64%; orders in hand at the end of 2016 were 1,044 million yuan, a decrease of 6.78%. Mainly affected by falling oil prices, orders were tracked later than expected. However, since the production limit agreement was reached in 2016, oil prices in the international market have continued to pick up, and investment confidence has also increased. The company's current participation in bidding and workload has also increased. First-quarter results are expected to increase by 50-100%: 2017Q1 had a profit of 4163-55.51 million yuan, an increase of 50-100% over the previous year. The main reason is the investment income from the acquisition of Anton DMCC and the confirmation of overseas EPC project revenue in 2017 in Q1, which was delayed by the company in 2016. The company previously invested more than 100 million shares in Andong Group. Anton Group's stock price declined significantly in the first quarter of 2017, which had a certain impact on the company's performance. Excluding the impact of this venture capital investment, the company expects the net profit of the main business in the first quarter of 2017 to increase by 110%-160% compared to the same period last year. Optimistic about the company's overseas market development, and expectations for overseas EPC orders are optimistic. Currently, the company's orders are mainly focused on overseas EPC projects, mainly from Iraq, Kazakhstan and Pakistan. The company is still working hard to open up the African market this year. We expect positive order expectations in the Middle East, Central Asia, South Asia and Africa markets. We expect the 2017-2019 results to enter the fast track (1) EPC business: the company previously announced the $148 million order for the Pakistan project, judging that 2/3 of the $650 million order for the Pakistan project is expected to confirm revenue in 2017; Kazakhstan's RMB 270 million order announced at the beginning of the year is expected to confirm revenue in 2017, with a cumulative total of around 900 million yuan between the two. The net interest rate of the EPC project is close to 20%, and the profit contribution is expected to exceed 150 million yuan. (2) Acquisition of Anton Oil Service's business in Iraq: The performance promise is 136 million yuan. We judge that it may exceed expectations. (3) Environmental business: Order expectations are optimistic. (4) Pipeline business: Strengthen pipeline business through the acquisition of Woodpecker. Oil prices have been adjusted recently. We believe that the oil and gas equipment industry has moved from thematic investments in rising oil prices to fundamental investments. The cyclical inflection point of oil and gas equipment is very clear, and we continue to be optimistic about medium- to long-term investment opportunities. In the field of oil and gas equipment, we are particularly optimistic about Hewlett-Packard, which has a high share of overseas performance, high performance growth, and a relatively low valuation. We believe Hewlett-Packard is the leader in this round of oil and gas equipment. The strategic cooperation between the company and Anton Oil Service has innovated the business model, and the company's overseas EPC orders will continue to grow at a high rate in the future. Currently, the company's market value is about 6.6 billion yuan. It is estimated that the company's EPS in 17-19 will be 0.35/0.49/0.66 yuan, and PE will be 18/13/9 times more. We continue to recommend it! Risk warning: the risk of controlling shareholders' holdings reduction, the continued decline in international oil prices, the progress of overseas orders falling short of expectations, the risk of exchange rate fluctuations, the risk of exchange rate fluctuations, and the development of environmental protection and pipeline inspection and maintenance business fell short of expectations.