Investment Overview The increase in executive holdings showed confidence, and the increase in sales would go smoothly; the annual increase in performance was strong; the investment rating did not take into account the impact of the increase. The company's net profit margin for 2017-2018 was 3.7, 481 million yuan, and EPS was 0.47 and 0.58 yuan. The price-earnings ratio was 23.4 times and 18.6 times, giving it a “buy” rating. (Current price as of November 13) Q3Q3 net profit and profit declined slightly year over year. According to the report for the first three quarters of 2017, Fuchun Environmental Protection realized revenue of 2,476 billion yuan, up about 33% year on year, net profit of 248 million yuan, up 37.3% year on year, 43.3% year on year after deduction, with earnings per share of 0.31 yuan. Among them, Q1/Q2/Q3 revenue split was 7.93 (+20%), 9.13 (+41%), 7.69 (+39%) billion yuan, less non-net profit 0.79 (+87%), 1.13 (+53%), and 0.49 (-5.9%). Overall, revenue continued to grow at a relatively rapid rate in the third quarter, while net profit declined slightly year over year, mainly due to rising raw material prices and the demand of downstream users due to environmental inspections. The company forecast net profit for the whole year was between 318-392 million, a year-on-year increase of 30%-60%. The increase in annual performance was mainly due to the company's implementation of the new “Coal-Heat Price Linkage System” at the Fuyang base and the increase in heating prices, and the gradual release of production capacity for new construction projects. In response to a net profit of 0.7-144 million in the fourth quarter, a year-on-year increase of 9.3% to 125%, the growth rate increased from the third quarter. It is expected that the short-term impact of environmental protection inspections may gradually ease, and demand from downstream users is expected to gradually recover. Gross margin declined due to rising raw material prices. In terms of profitability, due to rising raw material prices, gross margin decreased by 2.3% to 19.5% compared to the previous year, and the net margin was 10%, which was basically the same as the previous year. Net cash flow from operating activities fell 8.7% year on year in the first three quarters, mainly due to an increase in cash payments for raw materials. Among them, net cash flow from operating activities in the third quarter was 334 million yuan, up 60.1% year on year, 106% month on month, and the cash return situation improved quarter by quarter. Executives' continued increase in their holdings shows their confidence in the company's development. From July to September 2017, Mr. Zhang Jie, Secretary to the Chairman of the Company, Mr. Zhang Zhongmei, Director and General Manager, and Mr. Wu Bin, the director, increased their holdings by a total of 2.6 million shares, accounting for 3.26% of the company's total share capital, with a cumulative increase of 30 million yuan. The increase price was between 10.86 and 12.26. The current price has a higher safety margin. A fixed increase would be beneficial. On September 28, 2017, the company's application to privately issue A shares in 2016 was reviewed and approved by the China Securities Regulatory Commission's Issuance Review Committee. The private offering raised $920 million, 65% for the acquisition of 30% of Xingang Thermoelectric's shares and the Xingang Thermoelectric Renovation and Expansion Project, and the remainder for flue gas treatment and gas system technology transformation and cogeneration projects in the North Area of Liyang City. The completion of steady profit growth is expected to significantly increase the company's revenue and profit scale, and long-term endogenous growth can be expected. Risk indicates macroeconomic and policy risk; risk of rising coal prices and continuing downward risk of gross margin; production progress of new items falls short of expectations; private issuance falls short of anticipated risk;