Key investment matters: The company issued an announcement, and the application for non-public issuance was reviewed and approved by the CSRC. No written approval documents from the CSRC have been received yet. Peace view: The approval time for the adjustment plan is in line with expectations, and the issue price is likely to be higher than the reserve price of the issuance. On September 6, the company announced adjustments to the non-public stock offering plan. The subscription targets were Five Investment Group, Fortune Palace Plan, and Ecological Plan No. 1. The subscription amount was 720 million yuan, and the issue price was 70% of the average transaction price for the first 20 trading days before issuance or 12.14 yuan/share; previously, we expected it to take at least 2-3 months after the adjustment of the non-public issuance plan until completion, and the review and approval cycle was in line with our expectations; the company's average price for the latest 20 days is 23.76 yuan. Based on the calculation of the company's stock price performance, 70% is 16.632 yuan. Judging from the company's stock price performance, it is expected to be issued The price is likely to be higher than the reserve price for distribution, and repricing will reduce dilution of EPS. The “debt-for-equity” non-public issuance plan combined with employee stock ownership plans was launched at the same time, optimizing the financial structure while stimulating employee motivation. The company's non-public issuance plan plans to raise 270 million yuan, and expects to raise 480 million yuan to repay loans authorized by the Five Investment Group and 250 million yuan to supplement liquidity; after this issuance, the company's balance ratio is expected to drop from 69.34% to 50.36%, saving about 6.9 million yuan in financial costs every year, accounting for 27% of the company's financial expenses in the 2016 mid-year report. Financial structure optimization helps restore the company's profitability; at the same time, on September 6, the company launched an employee stock ownership plan. The total amount is no more than 9.9 million yuan, and no more than 815,500 shares have been subscribed to, and participation The number of people is 43, and the lockdown period is 3 years; the participants in the employee stock ownership plan include 5 executives and 38 core business executives. The subscription price principle is not lower than the current non-public offering price. This employee stock ownership plan will help stimulate the motivation of core personnel and further promote the continuous improvement of the company's performance. The results of the three-quarter report continued to reverse, profit levels improved markedly, and accelerated orders guaranteed a high increase in performance. The company's operating income for the first three quarters was 662 million yuan, up 17.73% year on year, and net profit was 334 million yuan, up 598.58% year on year; during the same period, the company's gross profit margin was 31.89%, net profit margin was 5.20%, up 3.77 percentage points and 4.32 percentage points, respectively, and profitability improved markedly; at the same time, from the company's announcement of the order situation, new orders of 1.91 billion yuan were added from January to September 2016, of which the construction engineering business was about 590 million yuan, PPP business orders of 1.32 billion yuan, and the company also owned Tonghai County The 2.5 billion yuan PPP project framework agreement, and the company's orders have been significantly increased. The PPP project is accelerating, ensuring high growth. Investment suggestions: The company's operating income for 2016-2018 is estimated to be 1,223 billion yuan, 1,712 billion yuan and 2,311 billion yuan respectively, and earnings per share of 0.39 yuan, 0.50 yuan and 0.74 yuan, corresponding to the closing price on November 2. Dynamic PE is 60.0 times, 46.3 times and 31.4 times, respectively, and PB is 4.8 times, 4.4 times and 3.8 times, respectively. This non-public offering successfully optimized the company's asset structure, reduced the company's financial costs and helped restore profitability. At the same time, the company launched an employee stock ownership plan to stimulate the motivation of core members and help the company grow. We are optimistic about the elasticity of the company's performance, the company's ability to obtain orders, its broad ecological platform positioning, and future state-owned enterprise reform space, and maintain the “recommended” rating for the company. Risk warning: accounts receivable recovery risks, orders falling short of expectations, slow expansion of extensions, progress in state-owned enterprise reform falling short of expectations, etc.