Investment points: Dongfang Energy, a “large group and small company” based in Beijing-Tianjin-Hebei Province, is the only A-share listed company in the utility infrastructure industry in Hebei Province. The majority shareholder is China Power Investment Group, which controls a total of 42.38% of the company's shares. By the end of 2015, the company had operating income of 2.56 billion yuan, net profit of 447 million yuan, and a total market value of 8.597 billion yuan in the secondary market on July 28, with typical “large groups and small companies” characteristics. The stable operation and transformation of the thermal power business of the new energy integrated service provider company's thermal power business is developing steadily. Currently, although the reduction in electricity prices and heat prices has put some pressure on the company's performance, the company's heating customers are mainly industrial enterprises, accounting for 80%, and the electricity consumption is large, and the profit is relatively good. Therefore, the performance of the company's heating business is at a high level in the heating industry. At the same time, the company took the initiative to shut down some unprofitable power plants, actively transformed the new energy power generation business, and actively developed new energy projects in surrounding provinces and cities such as Beijing, Tianjin, Shanxi, Shaanxi, Inner Mongolia, Gansu, etc. In 2015, the utilization rate of the company's photovoltaic power plants ranked first among group companies; in addition, it seized the opportunity of power system reform and established Hebei Liangneng Power Sales Company with a registered capital of 201 million yuan. The company is based in the Hebei region and relies on the accumulation of heating customers. Once the electricity sales market is fully liberalized in the Hebei region, the company's potential electricity sales customers are numerous and of excellent quality, which is expected to create another profit growth point. The national reform campaign began, and the asset injection of the Hebei company gradually began. At the end of 2015, the company completed the acquisition of 51% of Liangcun Thermal Power's shares and 61% of the heating company's shares. According to the commitment issued by China Power Investment Group, “In order to avoid competition in the industry and build Dongfang Thermal Power into a regional thermal power industry platform in Hebei, it was agreed to gradually inject into the Hebei region within three years after completion of the free transfer or non-public offering in 2013 (whichever is later), according to factors such as Dongfang Thermal Power's related assets and capital market conditions, etc., within three years, according to factors such as Dongfang Thermal Power's related assets and capital market conditions, etc. Qualified thermoelectricity-related assets and other high-quality assets.” As of the end of December 2015, China Power Investment Hebei Electric Power Company had an installed capacity of 1,421,200 kilowatts of electricity, accounting for 39.55% of the installed capacity of new energy. Among them, wind power is 148,500 kilowatts and photovoltaics is 413,700 kilowatts, making it the power generation enterprise with the largest installed capacity of photovoltaics in the province. Not only are high-quality thermal power assets still in place, but new energy assets are also expected to continue to be injected into listed companies. At the group level, the controlling shareholder China Power Investment Corporation had a total installed capacity of 107.4 million kilowatts as of the end of 2015, with clean energy accounting for 40.06% of the total installed power capacity. It is an aircraft carrier in the new energy sector in the country, yet the asset securitization rate is only 31.96%, the lowest among the five major power generation groups. National nuclear power leaders have stated many times that they want to speed up the group's overall asset securitization process, be a pioneer in state-owned enterprise reform, further optimize and adjust the business layout and management structure in accordance with the idea of specialization+regionalization and the requirements of asset securitization, further optimize and adjust the specialized development layout using the industrial sub-group or professional subsidiary model, and accelerate asset securitization. The injection of nuclear power assets and the Henan branch into its two Hong Kong stock listed companies has begun. We believe that the group's asset securitization has begun to substantially accelerate. Oriental Energy is based in the Beijing-Tianjin-Hebei region and is expected to position itself as the group's new energy asset integration platform, thus obtaining more high-quality asset injections.? The fixed increase completed the stock price inversion. In 2015, the company's fixed increase raised about 1.3 billion yuan in capital from non-public shares issued by 6 subscribers including Taikang Asset Management Co., Ltd., and the additional price per share was 19.19 yuan. Currently, it is higher than the company's secondary market price, and there is a certain margin of safety. As of July 29, the company's dynamic valuation in 2016 was 20 times. The company's dynamic valuation in 2016 was 20 times, which is relatively reasonable as an individual utility stock. As the company's new energy market gradually expands, the share of the new energy business will increase rapidly. The company will transform into a comprehensive new energy service provider, and the electricity sales business is also expected to become a new profit growth point. Furthermore, the national reform process at the company and group level in Hebei is progressing at an accelerated pace, and the company is expected to receive more high-quality asset injections, which will bring about a substantial increase in the company's performance at that time. We are optimistic about the company's business prospects and room for national reform. We expect the company's EPS for 2016-2018 to be: 0.78, 0.82, and 0.94 yuan/share, giving a buying rating.