Incident: Company announcement: (1) As an inferior limited partner, the company invested no less than RMB 120 million to participate in the share subscription of the Sichuan Beautiful City Development Equity Investment Center (limited partnership); (2) it plans to acquire 21% of the shares of Zhejiang Toren Robotics Co., Ltd. held by Zhejiang Ketong with its own capital of 1.86 million yuan. After completion, the company's shareholding ratio will increase to 30%. Using capital market advantages to promote smart industrial layout, Sichuan Dinghao, the managing partner of the “Sichuan Beautiful City” Industrial Fund, is an equity investment agency under the management of the Sichuan Provincial Government. The company subscribes to this industry fund, which, on the one hand, contributes to the smooth development of subsequent smart city project construction; furthermore, the company invests no less than 120 million yuan as underdeveloped capital and raises a certain percentage of supporting priority capital according to specific projects, which can not only seize project decision-making power, but also expand the company's project benefits. We expect that in the future, the company will use this industry fund as the main body and be responsible for the construction and operation of specific smart city projects. If it forms a good demonstration effect and has the ability to replicate from other places, it will strongly promote the company's strategic layout in the field of smart industry. Oil and gas oil services are growing steadily, and the smart industry is becoming a new engine. Demand for the continuous increase in the digitalization level of oil wells in China and effective collaboration with customers in the field of oil and gas equipment will further promote the steady growth of the company's traditional oil and gas equipment and oil service business, thus forming the cornerstone of the company's performance guarantee. Since its listing, the company has vigorously developed a layout in the fields of smart grain storage, smart cities, smart environmental protection, smart water, etc., expanding its traditional advantages in the field of automation to more industry applications and achieving good results. In mid-2016, it contributed 30% of the company's revenue stream. The demand for the digital transformation of traditional grain banks has brought the company an opportunity to enter a new field with a market space exceeding 10 billion dollars. At the same time, the company's advantages and experience in the field of automation are also scarce and valuable in fields including smart water services and smart cities, which is an important foundation for the company to achieve high growth. The company plans to surpass the revenue and profit of the non-oil and gas sector over the next three years, creating a new engine for performance growth. Valuation and ratings: We expect the company's net profit attributable to shareholders of listed companies in 2016-2018 to be 122 million yuan, 176 million yuan, and 243 million yuan respectively. The corresponding EPS is 0.21 yuan, 0.30 yuan, and 0.42 yuan respectively, and the six-month target price is 1400 yuan, maintaining the “buy” rating. Risk warning: The risk that the smart industry does not expand according to expectations, and the risk that accounts receivable are too high.