Report summary: Incident: The company announced on September 20 that it agreed to increase the capital of Heilongjiang Jingshenghua Environmental Technology Co., Ltd. with its own capital of 201 million yuan. After the capital increase was completed, the company's shareholding ratio was 67%. Increase capital for the Heilongjiang Jingshenghua Hazardous Waste Project to strengthen hazardous solid waste performance. All of the $201 million of this capital increase will be used to build a comprehensive disposal center integrating collection, transportation, storage, cooking, incineration, physicalization, comprehensive utilization, and curing agent landfill. There are 42 types of hazardous waste that can be treated after the project is fully completed. It will become the largest annual comprehensive hazardous waste treatment project in Heilongjiang Province. The first phase of construction is currently underway, with an annual comprehensive hazardous waste treatment scale of about 83,900 tons. It is estimated that the net profit after delivery of the project will reach 70.99 million yuan/year. At the same time, in 2017, the company increased Jilin solid waste capital by 228 million yuan for subsequent production and construction; Jilin solid waste is currently advancing phase II construction, and the production capacity will reach 160,000 tons/year after the expansion is completed. This capital increase in Jingshenghua can further achieve business coverage in hazardous waste treatment segments, which is conducive to improving the company's sustainable profitability. The capital was increased to hold Ikos, and the project was promoted to contribute results. The company increased its capital to Ikos in 2016 and became the largest shareholder, holding 45% of the shares. During the reporting period, the implementation progress of the EPC project of Huizhou Ikos C5/C9 Separation and Comprehensive Utilization was 52.37%, with confirmed revenue of 415 million yuan, and cumulative confirmed revenue of 476 million yuan, accounting for 39.94% of total revenue, which became the main driving force for the company's performance growth. Deploy water environment management and build a comprehensive environmental protection service provider. Through acquisitions that transcend science and innovation, the company has fully introduced cutting-edge technology and mature teams in emerging fields such as water environment management and ecological restoration, and obtained water environment management qualifications. Currently, the company has carried out demonstration projects in Shanghai, Changshu, Hangzhou, etc., with remarkable results. After the acquisition surpassed science and innovation, the company's comprehensive environmental service provider strategy was further promoted. In the short term, the company is expected to benefit from the proximity of the Black and Smelly River Assessment and an increase in performance. In the long term, the company will benefit from the advantages of a comprehensive environmental protection service provider and enhance its competitiveness in the industry. Investment rating and valuation: The company's net profit for 2017-2019 is estimated to be 405 million yuan, 584 million yuan and 710 million yuan, EPS is 0.47 yuan, 0.67 yuan, and 0.82 yuan, and price-earnings ratios are: 39 times, 27 times, and 22 times, respectively. Give a “buy” rating. Risk warning: Environmental business expansion falls short of expectations; market competition intensifies