According to the recently released Beijing Air quality Index (AQI), we see that there is still plenty of room for improvement in China's air quality. Zhejiang Tianjie Environmental Science and Technology Co., Ltd. ("Tianjie Environment") remains a key policy beneficiary against the backdrop of the Chinese government's emphasis on solving the air pollution problem. Repeat "buy".

There is plenty of room for improvement in China's air pollution problem. The air quality in Beijing attracts market attention frequently. We still believe that the Beijing Air quality Index is an indicator of the level of air pollution in China. According to the index, the percentage of days with excellent and good air quality since 2016 (as of October 23) is 53.4 per cent of the total recorded days, which is only slightly higher than 50.0 per cent for the whole of 2015. Excluding seasonal factors, the level of air pollution in Beijing has not declined significantly so far (see figures 1 and 2). Therefore, we believe that there is still plenty of room for improvement in China's air quality.

Tianjie is the beneficiary of the policy. In the context of the Chinese government's emphasis on solving the air pollution problem, we believe that Tianjie Environment is still the beneficiary of Chinese government policy because its products can be used to purify emissions from coal-fired power plants.

Net profit is projected to grow at a compound annual rate of 22.8% from 2015 to 2018. We maintain our profit forecast for Tianjie Environment and expect its net profit to grow at a compound annual rate of 22.8% from 2015 to 2018.

Repeat "buy", with a potential increase of 20.8%. We maintain the target price-to-earnings ratio of 2016 and the target price of Tianjie Environment at HK $9.41. The potential increase is 20.8%. Repeat "buy".