Key investment points: Optimizing the business structure and promoting growth with the “solid waste disposal+energy saving and environmental protection” model: the company previously had many businesses, involving environmental protection, coal, cold-pressed steel coils, etc., and gradually “slimmed down” since 2015, continuously reduced traditional cycle businesses such as coal, and made every effort to create a “solid waste disposal+energy saving and environmental protection” model, and net profit has continued to rise in the past two years. The company's revenue for the first three quarters of this year was 2.48 billion yuan, up 33.0% year on year, and net profit was 250 million yuan, up 37.3% year on year. The “slimming” effect was gradually reflected. The future focus is on environmental protection business, and the performance is expected to continue to rise. Technology and management are dual outputs, and epitaxial mergers and acquisitions are worth looking forward to: The company has been deeply involved in cogeneration projects for many years. Project mergers and acquisitions are not simply a profit patchwork, but rather a deep dive into project potential through export technology and management, maximizing individual project profits and capital utilization efficiency. Judging from the Quzhou and Changzhou projects that have been steadily put into operation, the PE acquired by the company is only 6-8 times, which is significantly lower than the merger and acquisition valuation of ordinary listed companies. Furthermore, the smog problem forces the management of small boilers, and China's resource endowments determine its position as the main consumer of coal. There is plenty of space for cogeneration projects, and we look forward to the company's future integration in the industry. The financial statements have outstanding advantages to guarantee future growth: The company's overall financial situation is excellent, the balance ratio is significantly lower than that of other environmental protection companies, the cash flow is relatively good. After the fixed increase (it is proposed to raise no more than 920 million yuan, which has already been completed), the balance sheet is more likely to expand. Furthermore, the company's loan interest rate is also low, and the cost is only 4.7%, all of which guarantee the company's future development. Governance structure optimization: The new management is younger, and the binding of interests further stimulates vitality: the company's management changed, Zhang Jie took over as the chairman of the company, Zhang Jie is younger and has rich overseas experience and management experience. At the same time, executives are deeply tied to the company's interests through participation in fixed growth, employee shareholding, and recent increases in holdings. We believe that management changes+the binding of executive interests can stimulate management motivation, and performance is expected to exceed expectations. Investment advice: The company currently operates steadily. In the context of the increasing prosperity of the cogeneration industry, it can continue to merge and acquire new projects through advantages in management, technology, and cost control to promote performance improvement. Furthermore, the company's balance and liability situation is good, providing a solid guarantee for future development. We expect the company's EPS to be 0.52 yuan, 0.67 yuan, and 0.84 yuan respectively from 2017 to 2019, maintaining a “buy” rating. Risk warning: Competition in the industry intensifies, and epitaxial mergers and acquisitions fall short of expectations.