Incident: On the evening of August 27, the company released its 2015 semi-annual report. The company's revenue for the first half of the year was about 958 million yuan, an increase of 11.16% over the previous year, and realized net profit attributable to shareholders of listed companies of about 181 million yuan, an increase of 26.03% over the previous year; basic earnings per share was 0.13 yuan/share, an increase of 30.00% over the previous year. The company's performance growth exceeded our expectations. Comment: The effects of fine management were evident, profitability continued to increase, and the company's revenue continued to grow steadily in the first half of the year, mainly due to the increase in the size and treatment volume of the Jingu sewage treatment plant after the relocation of the Tianjin Jizhuangzi Sewage Treatment Plant, the increase in the sewage treatment volume of some foreign port subsidiaries, and the increase in the unit price of sewage treatment services after the upgrading of the Wendeng project; at the same time, the increase in the scale of commissioned operation projects. In terms of profitability, the company's comprehensive gross profit margin was 43.96% in the first half of the year, an increase of 0.5 pct over the previous year, and gross margin remained stable; at the same time, cost control continued to be strong, with an expense ratio of 16.06% during the first half of the year, a decrease of 2.73 pct over the previous year. Among them, the management fee rate and financial rate decreased by 0.87 pct and 2.05 pct, respectively, and the sales rate increased by 0.19 pct year on year due to the increase in sales expenses of Kaiying. The net profit margin for the first half of the year was 18.94%, up 2.24 pct from the previous year. Overall, the effects of the company's fine management in improving quality and efficiency are gradually showing, and profitability has been continuously enhanced. The recovery of large arrears reduces the risk of bad debts, and sufficient capital helps accelerate business development. The company's monetary capital for the first half of the year was about 1.98 billion yuan, an increase of 142.08% over the previous year; accounts receivable was about 1.09 billion yuan, a year-on-year decrease of 57.31%. This is mainly due to the fact that during the reporting period the company withdrew 1.89 billion yuan of sewage treatment service fees owed by the Tianjin Municipal Drainage Company from 14 years ago. The recovery of arrears has, on the one hand, drastically reduced the company's accounts receivable and effectively reduced the potential risk of bad debts; on the other hand, it has greatly enriched the company's capital, and sufficient capital will provide strong support for the company to accelerate business development and continue to promote transformation and upgrading. Vigorously expanding new businesses and accelerating strategic transformation, the company continued to step up new business development efforts. During the reporting period, the new bid for Tianjin Houtai Scenic Area 2 #能源站项目 was won, and the new energy cooling and heating business, mainly ground source heat pump systems, was further expanded. Meanwhile, the subsidiary Kaiying Company continues to increase its market development efforts, and sales of patented deodorizing technology products throughout the sewage plant have achieved rapid growth. We believe that the acceleration of the development of diverse emerging businesses is expected to accelerate the company's strategic transformation and continuously open up new space for the company's growth. As pioneers in the domestic water industry, profit forecasting and investment rating companies have comprehensive competitive advantages in technology research and development, operation management, market networks, and brand value. At the same time, in the future, strategic investors and financial investors may be introduced in due course. Through state-owned enterprise reforms, they will continue to promote the improvement of resource integration capabilities and core competitiveness. They are expected to win more opportunities in the accelerated development of the environmental protection industry and achieve accelerated growth. We raised the company's profit forecast. It is estimated that the company's EPS for 2015-2017 will be 0.29/0.34/0.38 yuan/share, and the corresponding PE will be 31X/26X/23X respectively, maintaining the “increased holdings” investment rating. Risk warning 1) Policies such as the “Ten Rules for Water” have fallen short of expectations; 2) progress in upgrading sewage treatment plants is lagging behind; 3) business expansion is falling short of expectations; 4) rising sewage treatment costs have led to a decline in gross margin.