Core view: The company's additional issuance was approved by the State Assets Administration Commission, and the company's plan to methodically promote the company's non-public offering of no more than 74.87 million shares has been approved by the State Assets Administration Commission. After the issuance is completed, the company's total share capital will not exceed 467 million shares, and the controlling shareholder, the Academy of Chemical Sciences, will hold no less than 50.52% of the shares. Currently, the market value after the corresponding increase is 6.4 billion yuan. The sludge business is growing rapidly, and lignite upgrading technology is expected to be implemented. The company's sludge disposal technology won the second prize of the National Science and Technology Progress Award in 2014. The technical advantages are obvious. It has achieved industrial application in Shanghai, Guangzhou, Nanjing and other places, with cumulative sales of more than 34 sets. With the opening of the tens of billion sludge disposal market, products are expected to be released rapidly. The company's proprietary lignite quality improvement technology has now obtained industrial applications in Baosteel and Pangang, and it is expected that more projects will be launched in the first quarter of 2016. The company plans to raise 700 million yuan in non-public funding to promote the Nanjing Tianhua Phase II project (production capacity of 500,000 sets of complete equipment for lignite drying and upgrading systems and complete sludge drying system equipment). The expansion of production capacity is preparing for an explosion in demand for sludge disposal and lignite upgrading equipment. Expectations for the transformation of scientific research institutes and asset injections are strong. China Chemical Group Corporation is the largest basic chemical manufacturer in China, holding nine A-share listed companies. Judging from China Chemical Group's recent capital operation matters, the group is gradually integrating and securitizing assets within the sector. The controlling shareholder, the Academy of Chemical Sciences, has a lot of assets, and there are expectations of injection. Management incentive measures, such as employee shareholding and equity incentives, are expected to be implemented after additional issuance, driving rapid business development. Small companies, large markets, and large groups maintain “buy” ratings. EPS for 15-17 is expected to be 0.22, 0.28, and 0.42 yuan, respectively. The company is a powerful chemical equipment institute under the Academy of Chemical Sciences. It has remarkable advantages in the fields of drying and dehydration, and has extensive space for improving the quality of sludge and lignite. The Group is rich in high-quality assets, and the company may position itself as an asset injection platform for the Academy of Chemical Sciences in the future. The company is a small company in a large market and a large group, and maintains a “buy” rating. Risk warning: Industrialization of research and development results is below expectations; progress in the reform of research institutes is lower than expected.