Report summary: Relying on the China Merchants Bureau has obtained many benefits. The majority shareholder of the company is China Merchants New Energy, a subsidiary of China Merchants Bureau. As one of the four largest Chinese enterprises in Hong Kong, China Merchants Group provides many resources for the company's business development. On the one hand, the China Merchants Fund subscribes to the company's convertible bonds, and at the same time, the China Merchants Bureau gives the company a credit endorsement so that the company can obtain lower cost capital. On the other hand, China Merchants Logistics and other subsidiary companies of China Merchants Group provide resources such as land and roof for joint photovoltaic power plant construction. The Frontrunner project is efficient and has great potential. We visited and investigated the company's “Frontrunner Program” project in Datong, Shanxi on June 21. The project was in the process of being connected to the network on the same day, and has now been successfully connected to the network. As the first “PV frontrunner” project in the country, the Datong project was fiercely competitive, and the company's final successful bid also showed the company's strength. The Datong project has high photoelectric conversion efficiency and excellent natural conditions. Combining the development of photovoltaic power generation with the treatment of coal mining subsidence areas has a driving effect on the ecological restoration of coal mining subsidence areas and the transformation of resource-based urban energy development methods. The “Frontrunner Program” has become a photovoltaic installation plan promoted by the state. The Energy Administration recently approved 8 new Frontrunner technology bases. As the frontrunner of the “Frontrunner Program,” the company is expected to receive more additional installed capacity in the future. Lay out European projects to mitigate the subsidy problem. The company plans to begin the acquisition of photovoltaic power plants in Europe. The company has abundant project reserves in Europe. Currently, the scale has exceeded 1 GW. The revenue of European power plants is not much different from domestic power plants, but the PV subsidy can basically be settled monthly. Compared with the situation where domestic subsidies are basically in arrears of more than two years, subsidies for European projects are more timely, and the layout of European projects will enhance the company's cash flow. Profit forecasts. We anticipate that the company's operating income from 2016 to 2018 will be RMB 1.53 billion, RMB 2.31 billion and RMB 3.34 billion respectively, and net profit attributable to shareholders of listed companies will be RMB 321 million, 461 million yuan and RMB 635 million respectively; earnings per share will be RMB 0.07, RMB 0.1 and RMB 0.14, respectively, corresponding to PE 6.2, 4.3 and 3.1 million yuan. The company was given a target price of HK$0.63 for 6 months, giving the company a “recommended” rating for the first time.