Invest in central and downstream urban gas operators with unique highlights to enter the environmental protection business. Jinhong Energy currently operates more than 1,100 kilometers of long-term natural gas transmission and branch pipelines with a gas transmission capacity of about 3 billion cubic meters; the company owns about 40 urban gas concessions in Hunan, Shandong, Hebei, etc., and sold about 600 million cubic meters of gas in 2014. The environmental protection business is mainly flue gas desulfurization, denitrification, dust removal, etc., and the business scope covers 16 provinces and cities in China. Benefiting from Beijing-Tianjin-Hebei integration and the Winter Olympics. Jinhong Energy currently operates the Yingzhang Line, Hengshui-Jizhou, and Hengshui-Shahe natural gas transmission and branch pipelines in the Hebei region, and owns urban gas concessions in Zhangjiakou and eight surrounding counties and cities. As environmental collaboration between Beijing-Tianjin-Hebei is strengthened in the future, especially after the application for the Beijing Winter Olympics is successful, factors such as funding for “coal-to-gas” in Hebei will improve. We expect that the promotion of urban gas in Zhangjiakou and surrounding counties and cities, especially “coal-to-gas,” among industrial users, will accelerate. A possible reduction in gas prices in the future will help promote the “conversion of coal to gas.” We expect that the price adjustment range for natural gas for non-residents in China may be around 0.6 yuan/cubic meter. It is not likely that domestic natural gas consumption will fully recover. The improvement in gas consumption in some sub-industries that are more sensitive to the economy of gas prices may be significant; the reduction in gas prices will also help promote “coal-to-gas.” There is a lot of potential for epitaxial expansion. Since its listing, Jinhong Energy has been stepping up its expansion efforts through epitaxial expansion. The gas business has maintained around 6 new city gas franchises every year in 2013 and 14 through mergers and acquisitions and new installations. Furthermore, the company entered the environmental engineering service business through the acquisition of Beijing Zhengshi Tongchuang Environmental Engineering Technology Co., Ltd. It is expected that the company will continue to increase its mergers and acquisitions efforts in the gas and environmental protection business in the future, and the extended expansion is worth looking forward to. The financial forecast predicts fully diluted earnings per share for 2015-2017 to be RMB 0.79, 1.03, and RMB 1.37, respectively. The valuation and recommendations covered the “recommended” rating for the first time, with a target price of 24 yuan, corresponding to a price-earnings ratio of 30 times the 2015 price-earnings ratio. The company's current stock price corresponds to a price-earnings ratio of 23, 18, and 13 times the 2015-2017 price-earnings ratio, and 2.0, 1.9, and 1.6 times the price-earnings ratio for 2015-2017. The reduction in risk gas prices was lower than expected; natural gas consumption was sluggish; the strength of “coal-to-gas” in the Beijing-Tianjin-Hebei region fell short of expectations; epitaxial expansion fell short of expectations, etc.