Profit is predicted to increase by 40-70% year on year. The company released the 2016 annual results forecast. Net profit attributable to shareholders of listed companies in 2016 is expected to be 391-474 million yuan, an increase of 40-70% year on year; non-recurring profit and loss for 2016 is estimated to be about 110 million yuan (mainly including investment income from the transfer of Jiangnan integrated shares), and the overall performance is in line with expectations. At the same time, the company pre-disclosed the 2016 profit distribution plan: it plans to distribute a cash dividend of 0.9 yuan for every 10 shares, while using capital reserves to increase 30 shares for every 10 shares. In addition, the company plans to issue fixed interest rate corporate bonds of no more than 1.2 billion yuan and a term of not more than 5 years in installments to supplement working capital and repay bank loans. Focus on key points The photovoltaic industry boosts high performance growth. The rapid development of the photovoltaic industry in 2016 contributed to a relatively rapid increase in the company's photovoltaic system integration business revenue. The first three quarters had already achieved revenue of 2.86 billion yuan. Furthermore, the company is vigorously developing the operation of photovoltaic power plants, and fund-raising projects are progressing steadily. The first three quarters of power plant power generation revenue reached 52.95 million yuan, and is expected to achieve significant growth throughout the year. The company recently won the bid for the Longquan PV Sokou Project and completed a 70% equity transaction for the Shuyang Qingshuihe PV project, further consolidating its competitive advantage in the field of photovoltaic poverty alleviation. Equipment sales and power generation revenue will become a stable source of profit for the company in the future. The performance elasticity of the charging pile sector increased in 2017. The NEV subsidy policy is expected to be introduced in the near future, and the industry will resume high growth after a short pause in 2016. The production and sales volume of new energy vehicles will accelerate investment in charging facilities in various regions, and the company's charging pile sector will experience explosive growth in 2017. Furthermore, the company announced that it will establish Easytech Tianjin New Energy Co., Ltd. as a joint venture with its subsidiary in Tianjin as the company's northern headquarters base to engage in new energy vehicle charging facilities and smart cities. This move will help the company expand the northern market and seize market share ahead of schedule before the NEV charging facilities industry resumes high growth. “High turnover” may bring phased trading opportunities. The company's 2016 profit distribution plan plans implement a dividend of 0.9 yuan for every 10 shares and a high-ratio transfer distribution method that increases 30 shares. Based on previous market experience, this move will receive close attention from investors. The CICC Strategy Group recently released “How to lay out the year-end high turnover market?” The strategy report suggests that investors can pay attention to the high turnover market and that there are phased trading opportunities in the short term. Valuation and recommendations We maintain the company's earnings per share forecast of RMB 0.71/0.89 for 2016/2017 unchanged. Currently, the company's stock price corresponds to 2016/2017 37x/30x P/E. We maintain the recommended rating and target price of RMB 35.53, which is 35.10% upward compared to the current stock price, corresponding to 50x/40x P/E in 2016/2017. Electricity restrictions and electricity price subsidies in the risky photovoltaic industry; the introduction of the NEV subsidy policy has been postponed.