Report summary: Event: The company recently announced its 2017 semi-annual report. The company achieved revenue of 6.174 billion yuan in the first half of the year, an increase of 22.75% over the previous year; net profit of 403 million yuan, a year-on-year decrease of 52.67%. Comment: Coal prices remained high, investment income declined, and financial expenses increased. The company's performance declined sharply year over year, mostly due to resonance. In the first half of 2017, the company completed 12.247 billion kilowatt-hours of feed-in electricity, an increase of 17.51% over the previous year. The main reasons for the change in performance are: the company's operating costs in the first half of the year due to high coal prices reached 4.676 billion yuan, an increase of 37.48% over the previous year; most of the company's joint ventures were thermal power companies, and investment income calculated according to the equity law decreased sharply year over year; and the increase in the company's interest-bearing debt led to financial expenses of 726 million yuan, an increase of 70.80% over the previous year. A combination of adverse factors has led to a decline in the company's performance. An increase in electricity prices and a fall in coal prices are expected to help a steady recovery in performance. Starting from July 1, 2017, feed-in tariffs for existing coal-fired generator sets in Guangdong Province will increase by 0.0025 yuan/kwh. Preliminary estimates suggest that the company's 2017 revenue will increase by 16.8 million yuan. Considering that the peak of thermal coal consumption in summer is nearing an end and coal prices are gradually showing a downward trend, the company's performance is expected to rise month-on-month in the second half of the year. Leading clean electricity, power structure advantages are obvious. Since the second half of last year, the company has successively acquired a number of new energy, wind power and environmentally friendly power generation companies, and invested in the construction of the Wuping Chumiyan 50,000-kilowatt wind power project and the Gaoyou Lake 100,000 kilowatt wind power project. As of the end of the reporting period, the company has installed a total of 4.6058 million kilowatts of power in addition to coal-fired generator sets. The layout covers Zhejiang, Fujian, Inner Mongolia and other regions. The increase in clean energy installations has brought more room for the company to grow. Actively developing electricity sales business and speeding up overseas expansion, performance is expected to blossom a little more. The company responded positively to the electricity reform, expanded the industrial chain, and the electricity purchase and sale business of its subsidiary power sales companies was fully carried out. The company's overseas projects are also progressing smoothly, winning the bid and investing in the construction of the 180,000-kilowatt hydropower plant in Lamu Phase II in Papua New Guinea. The company achieved unified control and management of the company's domestic and foreign investment platforms through equity adjustments to overseas subsidiaries, and a multi-point layout at home and abroad contributed to performance growth. Profit forecast and valuation: The company's 2017 to 2019 EPS is expected to be 0.25, 0.35, and 0.43 yuan respectively, corresponding to PE of 26.38 times in 2017. It was covered for the first time, and a “increase in holdings” rating was given. Risk warning: Risks such as project progress falling short of expectations, and oversupply or continuation of electricity supply.