A public service provider with brand reputation. Shanghai Dazhong Public Utilities Co., Ltd. (Dazhong Public) is a leading integrated public service provider in Shanghai. The company focuses its main commercial operations on utility services, and uses financial and strategic investments as the second driving force to drive the company's business progress. In addition to core utility operations, public utilities hold many joint ventures through their investment portfolios based on the investment philosophy of long-term growth and long-term returns. Furthermore, public utilities are still actively seeking opportunities in the market to make various financial investments, strengthen their main business, and seek diversified development. Public service: Starting from Shanghai and reaching the surrounding area. Since 1992, public utility services have been established as a starting point for public transportation services in Shanghai. The company then gradually expanded its business map from public transportation to pipeline gas, sewage treatment, and road infrastructure. Up to now, Dazhong Public Utility has become the leading urban gas distributor in the Shanghai market and has gained absolute leadership in the Nantong gas market. The company will also actively seek to expand its utility market to more regions surrounding the Yangtze River Delta through mergers and acquisitions and strategic investments in the market. Financial investments: the second engine that drives business development. Through prudent and rigorous financial investments, public utilities can efficiently utilize surplus capital brought about by the main business to continuously increase corporate value. Referring to the company's past successful financial investment history, it has provided strong support for the company's performance and business development. We believe that the investment in Shenzhen Innovation Investment Group (Shenzhen Venture Capital) is the biggest highlight of the investment portfolio currently held by Dazhong Public Corporation. Currently, the company holds 13.93% of the shares in Shenzhen Venture Capital, and continues to receive stable and considerable profit sharing with potential for future growth from Shenzhen Venture Capital. In 15-18, the compound growth rate of net profit is expected to reach 14.8%. We expect the continued expansion of gas demand and the increase in sewage treatment production capacity will be the main driving force for the utility services sector. At the same time, we forecast that the gross margin of pipeline gas will gradually increase from 12.4% in 2016 to 13.7% and 14.8% in 2017 and 2018, respectively. At the same time, the profit sharing of associated companies will remain stable, at RMB 365 million, 427 million and 464 million respectively in 2016-18. We forecast that net profit will increase to RMB 562 million, 632 million, and 702 million yuan in 2016-18 in 2016-18 due to the above factors, respectively. First coverage, given a buy rating, with a target price of HK$4.15 per share. We use a segmented valuation method to measure operations and financial investments that are commonly used by the public. Referring to the valuation levels of the Hong Kong market and summing them up, we have obtained that the fair value of public shares is HK$12.25 billion, corresponding to a value of HK$4.15 per share, and the predicted price-earnings ratio for 2017 is 19.4 times higher. Our valuation estimates show that the current stock price has room to rise by 16.2%. Based on this, for the first time, we have covered a buying rating.