Event: The company released its 2017 three-quarter report. The first three quarters achieved revenue of 914 million yuan, an increase of 2976% over the previous year; net profit of the mother was 144 million yuan, an increase of 550.27% over the previous year. Among them, revenue for the third quarter was 436 million yuan, up 122241.68% year on year; net profit was 43 million yuan, up 353.38% year on year. Comment: Starting a new business led to an increase in gross margin and a decline in operating cash flow: during the reporting period, the company achieved a gross profit margin of 32.58%, an increase of 19.04% over the previous year; realized a net profit margin of 16.14%, an increase of 115.39% over the previous year. The main reason is that the company's projects have been implemented one after another and new subsidiaries have been set up. The net cash flow from operating activities in the first three quarters was -741 million yuan, a sharp decrease of 442.41% over the previous year. This was due to the company's cash outflow to pay for upfront purchases to carry out business and a sharp increase in cash outflow. The acquisition of North Garden was completed, and the winning bid increased the company's influence: The company proposed to acquire North Garden in February '17. By September 15, 90.11% of North Garden's shares had been transferred to the company. Of these, 73.43% of the transaction consideration was paid by issuing shares. The relevant additional shares were listed on October 20. The efficiency of resource integration in this acquisition is obvious, and the company's strength in the ecological garden sector has been complemented, helping to seek better market resources in the future. On October 10, Jinglan Garden (formerly “Northern Garden”) and the Northern Municipal Government jointly won the bid for the fourth phase of the Weifang High-tech Zone Government and Social Capital Cooperation Project. The project amount was 998 million yuan. The synergy effect after the acquisition was immediately apparent on the order, which shows how efficient its integrated resources are. Winning the bid this time is an important layout of the company's business in the north after entering the landscaping and ecological restoration industry. It effectively helped the company increase its market share and brand influence in North China. It is expected to have a positive impact on Jinglan Garden and the company's future business performance. Entering the clean energy sector, performance is expected to increase: the company established Jinglan Energy Technology to engage in clean energy business, and is committed to becoming a comprehensive clean energy service provider, focusing strategically on energy saving and consumption reduction industry expansion, industry optimization, and industrial upgrading. The team has technical advantages and rich experience, and has high order processing efficiency. In a short period of time, it has undertaken a number of industrial energy saving projects, involving various fields such as energy control, waste heat power generation, and chemical industry upgrading. In 2017, new orders reached 746 million yuan, and achieved operating income of 63.1294 million yuan and net profit of 306.597 million yuan in the first half of the year, which is expected to become a new profit growth point for the company. The performance of Jinglan Muhe is promising, and the “big ecology” pattern is taking shape: the subsidiary Jinglan Muhe vigorously promoted the agro-ecological water-saving irrigation business. On September 16, it won the bid for the modern agriculture “Tiantian Road” smart water-saving irrigation project in Julu County (1,715 billion yuan), which is of great demonstration significance. It also broke through regional restrictions, expanded business regions, completed the national layout, and drove the company's performance to improve. The company's industrial integration efficiency is high, and the layout of the three major sectors has been basically completed in a short period of time: in terms of agricultural water saving, the merger and acquisition of Muhe to save water to create a smart ecological sector; in terms of clean energy, Jinglan Energy Technology's performance has grown significantly; in terms of ecological restoration, the merger and acquisition of northern gardens has rapidly expanded the industrial chain. The “Big Ecology” business layout will drive the company's continuous development in the future. Financial forecast and valuation: The company is expected to achieve net profit of 4.09/5.79/756 billion yuan from 2017 to 2019, a year-on-year increase of 3310.3%/41.7%/30.7%, corresponding to EPS of 0.63/0.89/1.16 yuan. The current stock price corresponding to PE from 2017 to 2019 is 22.2/15.7/12.0 times, maintaining the “recommended” rating. Risk warning: PPP project expansion and implementation falls short of expectations, repayment risk, etc.