Incident The company signed three framework agreements. On November 4, 2017, the company issued an announcement announcing the signing of a “Strategic Cooperation Framework Agreement” with Xintian Technology Co., Ltd., and the two sides will cooperate in the fields of smart agriculture and smart water resources; sign a “Strategic Cooperation Framework Agreement” with Beijing Sanju Environmental New Materials Co., Ltd. to jointly develop their respective advantages, establish a long-term cooperative relationship and build a green agricultural industry chain; and sign a “Strategic Cooperation Framework Agreement” with the National Water Saving Irrigation Beijing Engineering Technology Research Center to establish a strategic partnership and carry out business and capital aspects All-round cooperation. Briefly review the signing of three cooperation framework agreements to accelerate the company's business. The “Strategic Cooperation Framework Agreement” agreement between the company and Xintian Technology is for a period of 5 years. Cooperation includes market cooperation, joint research and development cooperation, data sharing, technical exchange, establishment of projects, and joint application systems for science and technology awards. Xintian Technology is a pioneer in the smart energy, smart watch and system industry in China. The company was founded in 2000, with a registered capital of 530 million yuan, and listed on the Shenzhen Stock Exchange in August 2011. After years of development, it has now become an industry leader in smart energy, smart watches and systems in China. Its products cover the two major categories of smart energy and smart watches. The company and Xintian Technology will complement each other's advantages through cooperation, promote the development and application of IoT technology in agriculture, water conservancy and other fields, enhance the level of intelligence and technological content of new smart agriculture and smart water conservancy, and seize the technical highland of the industry. After the “Strategic Cooperation Framework Agreement” signed between the company and Sanju Environmental Protection, the two sides will use their respective industrial advantages to cooperate in the fields of agricultural big data and agricultural Internet of Things to rationally build an ecological agriculture industry chain. Sanju Environmental Protection is committed to developing large-scale utilization technology for straw biomass and a series of products such as green carbon-based fertilizer, soil conditioner, and green diesel. It has abundant industry resources. The company has absolute industry advantages in the field of water-saving agricultural irrigation. It is expected that the upstream and downstream agricultural industry chains will be opened up through cooperation in the future, and the synergy is promising. The “Strategic Cooperation Framework Agreement” signed between the company and the National Water Saving Irrigation Center is for a period of 4 years. The cooperation includes transformation and promotion of scientific research results, scientific research project cooperation, project expansion, and data sharing. The National Water-Saving Irrigation Center is a national engineering technology research center that undertakes strategic research projects and major scientific and technological projects related to rural water resources development in the country and industry. The center was established with the approval of the Ministry of Science and Technology in 1999. The competent authority is the Ministry of Water Resources, and the supporting unit is the China Institute of Water Resources and Hydropower Research and the China Irrigation and Drainage Development Center. In the future, the company will take advantage of market expansion and resource integration, combine the advantages of the National Water-Saving Irrigation Center in scientific and technological innovation and top-level design, and use agricultural water-saving irrigation as an opportunity to establish long-term stable business partnerships in the field of water conservancy, starting with project, technology, product or service cooperation, which will be of great benefit to the company's order fulfillment in the agricultural water-saving field and increasing its market share. We believe that the three organizations that have signed cooperation agreements with the company are representative, respectively, representing technical service providers, industry chain partners, and industry authorities. Establishing good cooperative relationships with these institutions will help the company's long-term development in the future: 1) Further increase the market share of the company's projects, create greater commercial value, and accelerate the implementation of the company's strategic layout; 2) Promote the company's green and smart ecological business development; 3) Lead enterprise development through technological innovation to create leading agricultural water-saving irrigation service models at home and abroad to enhance the company's market Competitiveness and brand influence. Three major layouts have been implemented, and the “big ecology” pattern is now a prototype company that relies on unique resource advantages to quickly complete industrial chain expansion through a “three-step” strategy in a short period of time. The “big ecology” industrial pattern supported by “agricultural water saving”, “Internet +”, and “ecological restoration” has already emerged. 1) In terms of “agricultural water saving”, Muhe saves water through mergers and acquisitions to enjoy industry development dividends; 2) In terms of “Internet +”, the ecological industry is fully integrated with the Internet, and the Internet platform model is actively exploring the use of the Internet platform model to promote the construction and operation of ecological projects and enhance the added value of the industry; 3) In terms of “ecological restoration,” the company rapidly expanded its business chain through the acquisition of Northern Gardens, and another important piece of the industrial layout was implemented. A number of policies continue to be favorable. The “13th Five-Year Plan” for the agricultural water conservation business proposed adding 30 million mu of effective farmland irrigation area and adding 100 million mu of efficient water-saving irrigation area. According to the estimate of an investment of 2,500 yuan/mu in efficient water-saving irrigation, the water saving market space will exceed 250 billion yuan by 2020, and the development prospects are broad. The “Opinions on Promoting Comprehensive Reform of Agricultural Water Prices” suggests that it will take about 10 years to establish and improve the agricultural water price formation mechanism. The increase in water prices will force farmers to control water expenses from a cost perspective, adopt water-saving technology, and increase the area for water-saving irrigation. Since 2016, agricultural water-saving irrigation PPP projects have been implemented at an accelerated pace, and the number and scale have grown rapidly. PPP has brought two changes to the industry: 1) the scale of project investment is large, and the comprehensive capacity requirements of enterprises are higher; 2) increasing farmers' participation and raising awareness of water conservation. In the context of the rapid advancement of the PPP model, the “small, scattered, and chaotic” situation of industry competition in the past will completely change, industry concentration will increase rapidly, and the company is directly benefiting as a leading representative of the industry. Up to now, the company has signed a 15.7 billion framework agreement. Among them, projects such as Hebei Julu County, Hulunbuir Agricultural Reclamation Group, Hebei Xingtai Weixian County, Hebei Province, Liangcheng County, Inner Mongolia, and Toketuo County have begun to be converted into official orders, and there is strong certainty that performance will be accelerated. Entering the clean energy sector, the company is expected to become another performance growth point in clean energy. Through the establishment of Jinglan Energy Technology, the company has entered the clean energy service field. The management team has extensive industry experience, quickly obtained superior technology through domestic and foreign cooperation, and undertook multiple industrial energy saving projects in a short period of time, involving various fields such as waste heat generation, industrial exhaust, dry coking, energy control, and chemical industry upgrading. The total amount reached 1,131 billion yuan, demonstrating the management team's excellent management ability and order collection efficiency. The clean energy sector is expected to become a new profit growth point for the company. Leveraging capital operations, actively lay out industrial investment to cultivate high-quality entrepreneurial projects and technology in vitro through enterprise-level innovation incubators to provide listed companies with good talent and project reserves; in addition, the company actively builds a comprehensive business platform for ecological industry investment, construction, operation and management, and establishes the Jinglan Jianxin Industrial Fund to provide strong financial guarantees for PPP projects. The management of investment advice and rating companies has high-quality management capabilities and strong resource endowments, showing strong advantages in capital operation and order execution; the “big ecology” industry pattern has initially emerged and is expected to become a scarce leading target in the field in the future; the recent increase in shareholders' holdings further shows confidence in development, and the inflection point of rapid performance growth has arrived. The company is expected to achieve operating income of 42.41 billion yuan and 6.588 billion yuan in 17/18, net profit to mother of 352 million yuan and 596 million yuan respectively. After dilution, EPS is 0.47 and 0.76 yuan respectively, maintaining a “buy” rating.