Event: The company released its 2017 three-quarter report. During the reporting period, the company achieved operating income and net profit of 1,527 million yuan and 296 million yuan respectively, with year-on-year growth rates of 27.11% and 48.72% respectively. The performance was in line with expectations. Key investment points: The project is progressing steadily, and the performance is in line with expectations. During the reporting period, the company's Huizhou C5C9 project and Wulanchabu PPP project progressed smoothly, the profit of Jilin Solid Waste Company increased, and the company achieved a 27.11% year-on-year increase in revenue. Low debt and light operation, and financial expenses fell sharply by 137.37%. Long-term accounts receivable were recovered, asset impairment losses fell by 5.01 million, overall project repayment improved, and the amount of operating cash flow increased significantly. In addition, sales expenses were saved by 6.6 million yuan, and the company's net profit from the parent company increased by 48.72%. The license is of high quality, and we look forward to an increase in production capacity. Jingshenghua's comprehensive disposal license for 42 types of waste covers all of Heilongjiang Province. The province's annual hazardous waste production will reach 1.04 million tons by 2020. The project is to be built in two phases. The first phase is under construction. The scale of comprehensive treatment of hazardous waste per year is about 83,900 tons. It is expected to be completed and put into operation in May '19. According to the company's estimates, it is estimated that the hazardous waste project will reach 70.99 million yuan/year in net profit after delivery. The company's wholly-owned subsidiary Jilin solid waste license qualifications: 80,000 tons of physical chemicals, 10,000 tons of incineration (including medical waste), and 110,000 tons of landfill. At the same time, the largest hazardous waste landfill in the three northeast provinces (the only hazardous waste landfill in Jilin Province) is under construction, with a storage capacity of 1.4 million square meters. It is extremely scarce, and the scope of hazardous waste collection and transportation is as far as Jiangzhe. Charges for hazardous waste are high, and licenses are scarce. Considering the commissioning of Jilin Solid Waste Phase II, we expect hazardous waste treatment performance to double in 2018. Furthermore, the company acquired 51% of Taihu Petroleum's shares in 2016 to lay out markets such as oil-based drill chips and sludge disposal ahead of schedule, and will collaborate with the company's deep petrochemical resources. The country's key cities for the management of black and smelly rivers were assessed at the end of the year 17, and the company layout had a clear first-mover advantage. The “Water Pollution Prevention and Control Action Plan” proposes that “municipalities directly under the Central Government, provincial capitals, and built-up areas of planned separate cities should basically eliminate black and smelly water bodies by the end of 2017.” According to estimates of a single black-and-smelly river with a unit investment of 35 million million/km, 205 black and smelly water bodies were basically completed in 2017 under key listing supervision, corresponding to a single annual investment space of nearly 20 billion dollars in 2017, and a national market space of about 100 billion by the end of 2020. Through acquisitions, the company transcends science and innovation into the management of black and smelly rivers. It has core technologies such as biological enzyme treatment, high-efficiency flocculation technology, and rapid sediment dredging and drying technology. Combined with microbial enzyme technology, it can carry out systematic mud management for large-scale rivers. Currently, demonstration projects for the treatment of black and smelly rivers have been carried out in Shanghai, Changshu, Hangzhou, etc., with remarkable results. We expect the company to benefit greatly from the proximity of the Black and Smelly River Assessment and the tightening of regulations. The waste acid disposal business has been launched, there is sufficient market space, and performance has increased significantly. Waste acid treatment is just needed, and the total amount needs to be treated is huge. According to statistics from the China Chemical Information Center, China produces more than 100 million tons of various industrial waste acids every year. According to the country's annual calculation of 20 million tons of waste hydrochloric acid from metal processing, pickling, and production of waste hydrochloric acid, the current 3,000 tons/day treatment project corresponds to an investment of 400 million yuan. Assuming an average unit price of 500 yuan/ton, the corresponding investment demand is 10 billion yuan, and the operating space is 10 billion yuan/year. There are 9 major scrap processing bases in the country, with a scrap production capacity of more than 3,000 tons/day, which is expected to release demand on a priority basis. The company's resource technology is in line with environmental trends. In the first three years after the first phase was put into operation, the annual net profit was 13.4821 million, and the performance increased significantly. It controls the leader in the petrochemical tailings seam market and commenced production at the end of 2017, which is a growth point for future performance. After completion of the first phase of Huizhou Ikos's project at the end of November '17, it will become the largest C5 separation project in the country (annual processing capacity of 300,000 tons of raw materials). C5 raw materials are scarce. According to estimates, the total number of C5 raw materials nationwide does not exceed 1.8 million tons, and the 300,000 tons of Ikos Phase I account for 17%, making it the largest comprehensive utilization project in Asia. Furthermore, after the completion of ICOS Phase II, C5/C9 deep processing capabilities will be formed. The main products are high-end resins such as DCPD hydrogenated resins and carbon-nine hydrogenated resins, which are widely used. The company increased its capital in 2016 by 45% of Huizhou Ikos and became the largest shareholder. It is expected that the commissioning of the project will greatly increase the company's profit level. Profit forecast and investment advice: Based on the progress of the project, the company maintained a net profit forecast of 4.14, 6.99, and 1,024 million dollars in 17-19, respectively, corresponding to PE of 17 and 18, 43 times and 25 times. The inflection point in the company's performance was obvious, maintaining a “buy” rating.