Investment highlights: 1. Incidents The company released its 2015 performance report. The company achieved revenue of 1.32 billion yuan, a year-on-year decrease of 5.98%; realized net profit of 78.523 million yuan, an increase of 23.66% over the previous year. 2. Our analysis and judgment (1) Performance is in line with expectations, and will maintain rapid growth in 2016. The company's three-quarter report predicts that net profit in 2015 will increase by 20%-40% year on year, and actual performance is basically in line with expectations. The company's total profit increased by 36.15% over the same period last year. On the one hand, it was due to the merger effect brought about by the acquisition of Grey Environment, and on the other hand, due to the increase in product gross margin. On February 25, the company announced that it had signed an equipment order contract with China Zhongyuan Foreign Engineering Co., Ltd., with a total amount of 34.52 million yuan, accounting for 2.6% of revenue in 2015. We believe the company's performance will continue to grow rapidly in 2016. (2) Strategic transformation, energy saving and environmental protection, performance is expected to surpass traditional business. In 2012, the company introduced Finnish technology and took the first step in strategic transformation of environmental protection business. In 2013, it acquired Lasca (the former Swiss Longsha Project) and entered the overall package of environmental protection projects such as solid waste treatment (environmental protection projects in the fields of high-end medicine, biopharmaceuticals, chemicals, etc., mainly incinerators). The acquisition of Grey Environment was completed in October 2015 to expand businesses such as sewage treatment and solid waste treatment (one of the earliest specialized hazardous waste disposal in Jiangsu). On August 20, 2015, Suzhou Hailu invested 35 million yuan to increase its investment in Zhenjiang Hehe. Zhenjiang Hehe is an environmental protection enterprise specializing in the disposal and utilization of heavy metal solid waste and the safe landfill of hazardous waste, and also has an industrial wastewater disposal subsidiary. In addition, Hangzhou Hailu, a holding subsidiary, signed a cooperation agreement with the Jinjiang Group to expand the municipal waste disposal market. The company's strategic transformation of environmental protection contractors opens up room for growth. The environmental protection demand in the Jiangsu and Zhejiang regions where the company is located is very high, and it has many high-quality environmental protection business assets. We judge that in the future, the company will not rule out further increasing its environmental protection business through mergers and acquisitions. The environmental protection business has strong profitability, which will lead to an increase in both performance valuations. (3) Benefiting from investment in the nuclear power theme, the nuclear power equipment business grew rapidly. On March 29, construction of the second phase of the Hongyanhe Nuclear Power Plant project officially began. On April 15, the State Council approved the construction of the “Hualong 1” third-generation nuclear power technology demonstration unit, and substantial progress has been made in restarting nuclear power. The company's nuclear power equipment products include basket cylinders, air bubbles, safety boxes, heat exchangers, waste liquid recycling bins, etc., and are being transformed into a general contractor for independent design and manufacture of complete products, and is expected to grow rapidly in the future. The company's nuclear power business has strategic cooperation with Shanghai One Machine Tool (a subsidiary of Shanghai Electric), CGN, and CNNC. The company is carrying out a “third-generation nuclear power nuclear grade container research and development and industrialization project” and has received an investment of 1.94 million yuan from the central budget. In 2014, the company's nuclear power product revenue increased by 636% year on year. 3. Investment recommendations Consider the acquisition of Grey Environment. It is estimated that the company's 15-17 diluted backup test EPS will be 0.20/0.24/0.28 yuan, and PE will be 36/30/25 times. The company will accelerate its strategic transformation to the fields of environmental protection and nuclear power. In the future, it is not ruled out that another epitaxial development in the field of environmental protection will not be ruled out, and performance is expected to exceed expectations. It is expected that in the future, the company's valuation will be close to the valuation level of nuclear power equipment and environmental protection equipment, and maintain the “recommended” rating.