Key investment points: Signing a pipeline transaction framework agreement is conducive to expanding market share. Shengbang Plastic, a wholly-owned subsidiary of Shengli Co., Ltd., signed a trade framework agreement with Chiping Xinfa Gas and Gaotang Jinshi Gas. The company's board of directors agreed to purchase no more than 10 million yuan of polyethylene pipes and services from Shengbang Plastic. This transaction is a related transaction, and the price is set according to the market price. Chiping Xinfa Gas and Gaotang Jinshi Gas are mainly engaged in pipeline gas management (operating with a license), etc. This transaction will help the company expand its market share of gas pipelines. Change the use of capital raised and develop natural gas pipeline network business. In order to adapt to changes in the market environment and accelerate the development of natural gas business, the company decided to change the use of capital raised to supplement the working capital required for the compressed development of natural gas business in Qingdao Runhao and Dongtai, vigorously promote and develop the natural gas pipeline network field with larger profit margins, higher profit stability, and better development prospects, and improve the efficiency of the use of capital. The total investment amount for the new gas station project of Qingdao Runhao and Dongtai Compression was 60.87 million yuan. The company decided to use all of this investment amount to permanently supplement the working capital required for the development of the natural gas business of Qingdao Runhao and Dongtai. Local pipeline companies will benefit from pipeline network reforms. Judging from the current gas pipeline network reform method, the backbone network will be the first to be divested, and in the future, local piping and transportation enterprises will be able to access the backbone network as a third party to transport natural gas by paying pipeline transportation fees. With the further deepening of the pipeline network reform, the gas purchase costs of local pipelines and transportation enterprises will be reduced, and the sales volume of natural gas will increase. The company's vigorous development of natural gas pipeline business is expected to benefit from gas pipeline network reform. The natural gas business has risen to become the company's largest industry. The company has accelerated the pace of strategic transformation, and the natural gas business continues to maintain a rapid growth momentum. The company has accelerated the promotion of urban gas franchise mergers and acquisitions. By the end of 2015, the company had successively completed cooperation in projects such as Puyang in Henan, Bazhou in Hebei, Pulandian in Dalian, Puwan New Area, and Zhuanghe in Dalian. The scale of natural gas increased rapidly, making it the company's largest industry. Use terminal resources to develop automobile charging and switching services. In order to develop new energy business, Shengli Co., Ltd. and Qingdao Teruide signed a “Strategic Cooperation Agreement” to jointly promote strategic cooperation in the field of automobile charging. This strong joint effort began in terminal fields such as gas stations owned by Shengli Co., Ltd. to promote new energy vehicle charging business cooperation. Through this strategic cooperation, the company will enter the field of automobile charging and switching, build a multi-level new energy supply system using the existing market terminal network, and open up new business growth points. Profit forecasts and investment ratings. We expect Shengli Shares to have an EPS of 0.40, 0.43, and 0.52 yuan respectively from 2016 to 2018. According to the 2016 EPS and a price-earnings ratio of 20 times, we gave the company a target price of 8.00 yuan to maintain the “increased holdings” investment rating. Risk warning: transformation risk; natural gas business development progress falls short of expectations, etc.