Event: The company and Jiangsu Jinzhi Technology jointly established Nanjing New Energy Smart City Development Co., Ltd., with a registered capital of 50 million and 51% of the company's shares. The joint venture will focus on developing electric vehicle charging stations and distributed energy businesses related to new energy and smart cities. Comment: Relying on the assets of the parent company, it made a strong entry into the electric vehicle charging pile business. The actual controller of the company, Urban Construction Group, owns the Nanjing Public Transport Group, which operates the vast majority of bus assets in Nanjing. The first business of the joint venture in the announcement is to carry out investment, construction and operation of charging piles, charging stations and charging tower projects in public facilities such as bus stations in Nanjing, and to build a regional charging station operation platform and a charging station operation service system open to electric buses, electric taxis, etc., and social new energy vehicles. Compared to the 2C business, the 2B business has greater stability and profitability certainty. The promotion of new energy buses in Jiangsu is accelerating, and the Ministry of Finance and three ministries and commissions, including the Ministry of Finance, issued the “Notice on Improving the Price Subsidy Policy for Refined Oil Products for Urban Buses and Accelerating the Promotion and Application of New Energy Vehicles”, which clearly stipulates that the proportion of new energy vehicles added and replaced in Jiangsu Province in 16-19 must not be less than 50%, 60%, 70%, and 80%. We expect Nanjing to replace electric buses faster than the national regulations. It is estimated that the proportion of new energy buses will reach 80% within three years. Currently, the Nanjing Public Transport Group operates about 7,500 buses, including about 1,500 new energy buses. It is estimated that the bus group will add 2,000 electric buses every year in the next three years. New energy charging stations have strong profitability. The company's goal is to expand and strengthen the energy industry, roughly estimating that each new energy bus consumes 50,000 kilowatt-hours of electricity per year, and that the total charging and service charges per kilowatt-hour is 2.1 yuan. From 2016 to 18, the charging revenue scale of electric buses in Nanjing can reach 367 million, 577 million, and 787 million yuan. The company has an absolute resource advantage in the 2B side business. In its development plan, the company emphasized the need to expand and strengthen the energy industry. The establishment of this joint venture shows the company's determination to rapidly expand the energy industry. The company's net profit is expected to be 280 million/360 million yuan in 16-17, corresponding to PE20/16 times, and will continue to be “highly recommended”. Risk warning: the development of various businesses of the joint venture company fell short of expectations; natural gas business expansion fell short of expectations; asset consolidation progress fell short of expectations