Key investment events: Kangda Environmental Protection recently held an investor conference call on the acquisition of 15% of the shares in Henan Zhongyuan Asset Management Company. Zhongyuan Asset Business is developing very rapidly. Zhongyuan Asset was established in July 2015 and officially commenced operations in October of that year. It is mainly divided into five major business segments, including non-performing asset disposal, fund management and investment, aviation financial leasing, asset and wealth management, and commercial factoring, all of which are developing rapidly. The asset dividend situation of Zhongyuan. This year, it is expected to bring about 20 million yuan in dividend income to the company. Due to the start-up period, the current dividend policy is not stable, but as the scale of the company expands, there will definitely be an increase in the future. Kangda Environmental Protection's cooperation model with Zhongyuan Assets. In the future, cooperation will mainly be carried out through the joint establishment of an environmental protection fund. The PPP project company is controlled by the fund and is not merged, but it can bring benefits to Kangda Environmental Protection through EPC general contracting. The potential return on investment is already impressive. As the only local asset management platform in Henan Province, Zhongyuan Asset's equity value is far higher than the book value. Therefore, the potential investment return of Kangda Environmental's shares has reached at least 50% or more. In the future, Zhongyuan assets will also seek listing, and the equity value is expected to increase even more. Cash acquisitions do not put pressure on the company's capital. Kangda Environmental Protection has sufficient cash on hand, and the company has also made continuous breakthroughs in financing, so after paying the equity purchase price in cash, it will not put much pressure on capital. Investment advice: We expect the company to have an EPS of $0.20/0.24/0.29 for 2016-2018, corresponding to the current stock price of PE 8.15/6.64/5.43 times, maintaining a “buy” rating, with a target price of HK$2.25. Risk warning: Fiscal solvency declined, PPP project yield fell short of expectations, and RMB depreciation.