Investment highlights: A leader in the submersible pump industry. Dongyin Co., Ltd. is the largest manufacturer and exporter of submersible pumps for wells in China. It is a high-tech enterprise specializing in R&D, production and sales of submersible pumps for wells, small submersible pumps, onshore pumps, etc., and its products are sold in more than 60 countries and regions in Asia, Europe, and Africa. The company has more than 40 series and more than 2000 types of products, which are widely used in fields such as the production of active water intake, agriculture and forestry irrigation, and factory mine supply and drainage. They play an indispensable role in fighting droughts, ensuring increased grain production and harvest, and solving safe drinking water for humans and animals. The demand for groundwater development and government support provide a broad space for the company. The company's core product, the submersible pump for wells, is an important deep well water lifting equipment, which plays an important role in solving domestic water production, increasing agricultural production, and fighting droughts. Currently, the world's surface freshwater resources, which are easy to extract, are unevenly distributed and seriously scarce, and are facing increasingly serious pollution problems. The rational development and utilization of groundwater resources has great potential and will promote the continuous development of the submersible pump industry for wells. In recent years, China has vigorously promoted agricultural mechanization and agricultural industrialization, and increased attention and investment in the construction of water conservancy projects such as safe drinking water and agricultural irrigation in rural areas. The company's submersible pump products have the advantages of energy saving, economy and environmental protection, and have broad development prospects in the context of agricultural mechanization at home and abroad and government support for environmental protection. The technical quality is excellent, and the products are mainly sold overseas. The company's products are mainly exported by its own business, and foreign sales revenue accounts for about 90%, and has established long-term and stable cooperative relationships with more than 100 customers in Africa, Asia, Europe and other regions. Demand for the company's products is strong, and major importers have no restrictive trade policies on submersible pumps for wells. The company has strong technical strength, product performance and quality are close to the international advanced level, can adapt to the high requirements of unstable voltage in some regions for the stability of submersible pumps, and has a good cost performance advantage. The company has also obtained the PC and SONCAP certifications required to enter foreign markets, and has received a high level of market recognition. Fund-raising project: This time, it is proposed to invest 257 million yuan of capital raised to invest in a submersible pump construction project with an annual output of 1 million units and a new technology research and development center. After completion of the project, the annual production capacity of submersible pumps for wells will be added to the current production capacity of 850,000 units, and the annual production capacity of small submersible pumps will be increased by 800,000 units, and 200,000 units of small submersible pumps. The construction period is expected to be 12 months, with a production rate of 60% in the first year after commissioning and a production rate of 100% in the second year. Market demand is strong, and the company's capacity utilization rate in 2014 and 15 has reached about 125%. This fund-raising project will effectively solve the problem of insufficient production capacity, and it is hoped that in the context of China's accelerated development of agricultural water resources, the company will explore the domestic market and form a pattern of simultaneous development at home and abroad. The number of new shares issued by the company this time is 25 million shares, the total share capital after issuance is 10 million shares, the amount raised is 257 million yuan, the issuance fee is 41.9659 million yuan, and the issue price is 11.97 yuan/share. The 2016-2018 EPS of the dilution calculation company was 0.99, 1.57, and 1.85 yuan respectively. According to the 16-year PE valuation of comparable companies, we gave the company 25-30x PE in 2016. The reasonable price range should be 24.75-29.70 yuan, so we recommend purchasing. Risk warning: demand is slowing, company performance fluctuates, and fund-raising projects fall short of expectations.