Investment points Safety view: Accumulation and development, entry into the smart home market: Shengda Forestry has decades of experience in the traditional “forest board” field, and plans to expand its rich accumulation in the traditional home improvement field to the smart home market. Shengda Smart Home integrates two major systems of intelligent internal management and intelligent user experience. It will enhance consumers' home happiness through the three major systems of “control intelligence,” “storage intelligence,” and “intelligent scenarios”; at the same time, it will cut into users' needs for a “safe home,” and improve the safety of users' homes through the application of functions such as pattern decoding, process monitoring, and automatic alarms. We believe this is an important exploration of the company's traditional business strategy transformation. With the company's good user reputation and many offline experience stores, the company's “smart home” strategy will benefit from the growth of the smart home market. Strengthen the new energy business and implement the two-wheel drive strategy: Since 2013, the company has actively transformed the new energy business and gradually implemented the “household products+new energy” two-wheel drive strategy. At present, the company has two major actions in the new energy business: first, the company plans to increase 780 million yuan for the “clean energy project with an annual output of 400,000 tons in Pengshan County” to invest in the liquefied natural gas business; second, it plans to invest 280 million yuan in monetary capital to increase capital and expand shares in the three wholly-owned subsidiaries of Shaanxi Luyuan, Jinyuan Natural Gas, and Jinyuan Logistics (51% of each). After the completion of this restructuring, the company will add two LNG plants and four LNG filling stations to the LNG industry chain to improve the company's strategic layout in the LNG industry chain。 M&A funds establish epitaxial expansion, and employee stock ownership plans demonstrate long-term confidence: based on the “household products+new energy” two-wheel drive strategy, the company has set up investment mergers and acquisitions funds in two major business directions, and both plan to invest no more than 200 million yuan to set up M&A funds with a scale of 2 billion dollars. It is expected that further external development will be carried out in the future. At the same time, the company is currently actively promoting the employee stock ownership plan. There are no more than 200 participants, and the total capital limit at the time of establishment is 60 million yuan. This is the first time since Shengda Forestry has launched an employee stock ownership plan since its listing, demonstrating the long-term confidence of the company's managers. Investment Strategy: We expect the expected operating income for 2015-2017 to be 801/18.52/2,311 billion yuan, corresponding EPS of 0.03/0.12/0.16 yuan, and corresponding PE of 314/80/58 times. We believe that Shengda Forestry is determined to vigorously develop the dual main business of “household products+new energy,” and that the establishment of a two-way merger and acquisition fund has laid the foundation for the company's extended development, and that the proposed employee stock ownership plan is conducive to the company's long-term development, covering it for the first time, and giving the company a “recommended” rating. Risk warning: industry competition intensifies, market demand falls short of expectations, transformation falls short of expectations, etc.