Incidents: 1) The company announced its three-quarter report. The first three quarters achieved revenue of 2,476 billion yuan, an increase of 32.98% over the previous year, net profit of 248 million yuan, an increase of 37.3% over the previous year, and net profit of 243 million yuan after deducting non-return net profit of 243 million yuan, an increase of 43.29% over the previous year. 2) The company expects net profit of 318-392 million yuan in 2017, an increase of 30%-60% over the previous year. Key investment points have shown steady growth in performance. The company increased by 37.3% year-on-year in the first three quarters. The main reasons are: 1) the company implemented a new “coal and heat price linkage mechanism” and raised heating prices, 2) the gradual release of new production capacity, and 3) the South African economy was consolidated in February 2017. Affected by environmental inspections, the third quarter's performance declined, and it is expected that there will be improvements starting in the fourth quarter: on a quarterly basis, the revenue growth rate for the first, second, and third quarters was 20.01%/41.39%/38.63%, respectively, and the net profit growth rate for the first quarter was 83.67%/49.05%/-13.99%, respectively. We believe that the decline in profit growth in the third quarter was mainly due to: 1) rising prices of coal and other raw materials (the average value of the national coal price index for the third quarter of '17 increased 22% year on year), 2) August 11 to September 11, Zhejiang environmental inspectors were stationed in Zhejiang. For a period One month had a significant impact on the production of downstream enterprises and affected the company's performance. Gross margin has declined, and fee control has been very effective. 1) The company's gross margin for the first three quarters was 19.54%, year-on-year -2.28PCT. We believe that the decline in gross margin was due to the rise in raw material prices; 2) The company's sales/management/financial expenses ratio was 0.14%/4.60%/1.77% respectively, year-on-year -0.06/-0.76/-0.59PCT, and the fee control effect was good. Operating cash flow continues to improve. The company's operating cash flow for the first three quarters was 491 million yuan, -8.72% year-on-year. On a quarterly basis, the operating cash flow for the first/second/third quarter was -0.07/1.62/335 million yuan, respectively, -105.97%/-25.86%/60.09% year-on-year. If coal prices stabilize in the future, the company's operating cash flow is expected to continue to rise. The fixed increase passed smoothly, and the endogenous growth rate of performance was strong. The company's 2016 fixed growth plan was successfully completed in September 2017. The proposed number of non-public shares will not exceed 159 million shares, and the total capital raised will not exceed 920 million yuan. After deducting issuance fees, all of the capital raised will be used to acquire 30% of the shares of Xingang Thermal Power, capacity expansion and technological transformation of the existing business. It will add 550t/h heating +36 MW of power supply capacity, increase revenue by 497 million yuan/year, and strong endogenous growth in performance. The company continues to acquire “solid waste+energy saving” targets, and the extension strategy has been successful many times. Since 2012, mergers and acquisitions have been completed once a year on average, and the M&A targets are synergistic. In February 2017, the company acquired 92% of the shares of Southern Normal Security Energy, and in March, it acquired the remaining 30% of the shares in Changzhou Xingang. In addition to Fuyang, it has four major bases: Quzhou, Changzhou, Liyang, and Nantong. After mergers and acquisitions of subsidiaries Zhe****yuan/Quzhou Donggang/Changzhou Xingang, 2017H1 achieved net profit of 0.39/0.34/0.47 billion yuan, +249.04%/14.99%/60.66% over the same period last year. Jiangsu Thermal Power (responsible for the Liyang project) was put into operation in 2016. 2017H1 has achieved net profit of 4.13 million yuan, South China has lost 91/10.35 million yuan in 2015 and 2016, and has achieved net profit of 2.68 million yuan after the merger of 2017H1. The board of directors completed the increase in holdings, demonstrating confidence in the company's future development. The company announced that within 3 months from June 9, 2017, some directors and senior management plan to increase their holdings of the company's shares through centralized bidding in the secondary market, with an increase of not less than 30 million yuan. As of September 4, 2017, the company's chairman and director, Mr. Zhang Zhongmei, director and general manager, and Mr. Wu Bin, director, respectively, increased their holdings by 129/86/450,000 shares through centralized bidding transactions in the secondary market, with an average price of 11.67/11.58/11.07 yuan/share, amount 1500/1000/ 5 million yuan, a total increase of 2.6 million shares, to an amount of 30 million yuan. The completion of the board of directors' holdings increases shows confidence in the company's future development. Profit forecast and valuation: Assuming that the non-public offering is completed in 17 years, considering the rise in raw material prices and the factors affecting downstream production this year's environmental inspection, we downgraded the company's 2017-2019 EPS 0.4, 0.53, and 0.65, corresponding to PE30, 22, and 18 times, maintaining the “buy” rating! Risk warning: Offsite projects are running less than expected. The price of coal continues to rise.