Key investment points The company achieved operating income of 435 million yuan in the first quarter of 2016, an increase of 7.14% over the previous year, mainly due to the increase in subsidiary revenue. Looking at the denominator and subsidiaries, the parent and subsidiary companies achieved revenue of 393 million yuan and 42 million yuan respectively, with year-on-year increases of 2.16% and 90.91% respectively. The increase in revenue contributed by subsidiaries mainly came from the merger of Deep Blue Environmental Protection. The company achieved a comprehensive gross profit margin of 21.14% in the first quarter of 2016, down 1.77% from the same period last year; realized a net profit margin of 2.11%, down 4.75% from the same period last year, mainly due to the double impact of lower gross margin and higher period expenses. The company's period expense ratio for the first quarter of 2016 was 16.27%, an increase of 3.32% over the same period last year, mainly due to an increase in management expenses. The company's net operating cash flow per share for the first quarter of 2016 was -0.13 yuan, an increase of 0.74 yuan/share over the same period last year, mainly due to the company's increased project payment collection efforts and strengthened capital control. From the perspective of the revenue and cash to payment ratio, the company's revenue and payment ratios for the first quarter of 2016 were 142.99% and 188.92% respectively, up 7.03% and -105.33% respectively from the same period last year. The sharp decline in the cash flow ratio was the main reason for the improvement in cash flow. Judging from the balance sheet, the company's advance payments increased by 52.04% compared to the balance at the beginning of the year, mainly due to an increase in environmental engineering projects and environmental protection equipment materials paid by the subsidiary Deep Blue Environmental Protection during the reporting period; at the same time, other receivables increased by 80.71% compared to the beginning of the year, mainly due to an increase in bid deposits and transactions paid. Considering the active bidding and project commencement and the combined effects of Deep Blue Environmental Protection, we expect the company's revenue to continue to grow rapidly. Earnings forecasts and ratings. We expect the company's 2016-2018 EPS to be 0.17 yuan, 0.21 yuan, and 0.24 yuan respectively, and the corresponding PE is 43 times, 37 times, and 32 times, respectively, maintaining the company's “increased holdings” rating. Risk warning: the impact of real estate regulation on real estate and garden business, project repayment falls short of expectations