Report summary: Event: The company released its 2017 interim report and achieved revenue of 1,572 billion yuan, an increase of 83.62% over the same period last year, and a net profit of 260 million yuan, an increase of 116.13% over the same period last year. The main reason for the sharp increase in the company's net revenue is the rapid growth in the performance of ecological environment construction, sewage treatment, and environmental protection equipment. In addition, driven by revenue, the company's management expenses increased 35.04% year over year, financial expenses increased by 21.17%, and income tax expenses increased 211.48%. In terms of cash flow, net operating cash flow decreased by 182 million yuan, net outflow increased 155.51% over the same period last year, and net increase in cash and cash equivalents decreased 90.28% from last year. Mainly, repayment of environmental engineering projects and PPP projects was relatively slow, and capital advances took a long time. Acquire Yuanshuo Environmental Protection and continue to promote a comprehensive environmental platform company layout. During the reporting period, the company plans to issue shares to all shareholders of Yuantai Environmental Protection to acquire 100% of their shares at a transaction price of 550 million yuan. Yuantai Environmental's three-year performance commitment is not less than 38 million, 47 million, and 57 million. In 2014, the company acquired Zhejiang Dredging and Shuimei Environmental Protection respectively to enter the fields of water conservancy engineering and sewage treatment; in 2016, the company acquired Zhongyi Ecology and entered the field of ecological restoration. After years of development, Xingyuan Environmental has achieved the transformation from a single equipment manufacturer to a comprehensive environmental protection enterprise. The transaction will further improve the company's business layout, link the company's existing business lines, and enhance the company's profitability. The entire industry layout enhances PPP procurement capabilities, and sufficient on-hand orders guarantee performance development. Through a series of mergers and acquisitions, the company has now achieved deep integration and collaboration of “design+equipment+engineering+operation+maintenance” in the field of environmental protection. The company has taken full advantage of the PPP model and accepted a large number of PPP orders. In the first half of the year, the company signed a PPP project for urban park and green space construction in Ningguo City, Tofhan Town, Wensu County, phase I of the characteristic small town construction project, Shibing County, the relocation project for poverty alleviation (poverty alleviation ecological immigration) construction projects, a total of 7.58 billion yuan (including pre-winning projects), and the 2016 mid-term bid order of 1,918 billion yuan, providing strong support for future performance. Investment rating and valuation: The company's net profit for 2017-2019 is estimated to be 531 million, 795 million and 1,053 million yuan, EPS is 0.52 yuan, 0.78 yuan, and 1.04 yuan, and price-earnings ratios are 55 times, 37 times, and 28 times, respectively. Give a “buy” rating. Risk warning: PPP progress falls short of expectations; gross margin falls further