Incident: The company jointly won the bids for the “Baotou Shanbei Ecological Restoration Project PPP Project”, “Baotou Park Ecological Construction Project PPP Project”, and the “Baotou Daqingshan South Slope Ecological Restoration Project PPP Project”. The budget amounts were 748 million yuan, 1,315 billion yuan, and 6.037 billion yuan respectively. The cooperation period was 10 years. Comment: Three PPP orders were signed, with a total amount of 8.1 billion yuan: the “Shanbei Ecological Project,” “Park Project,” and “Daqingshan South Slope Project” that the company tendered this time. The tenderers were all from the Baotou Agriculture and Animal Husbandry Bureau. The reasonable profit margin was 6.95%, and the payment method was government payment. The budget amounts for the three projects were 748 million yuan, 1,315 billion yuan, and 6.037 billion yuan respectively, accounting for 26.14%, 45.96%, and 211.01% of the company's 2016 operating income of 2,861 billion yuan. The total amount of the three PPP orders that won the bid at the same time was 8.1 billion yuan. If the winning notice is received, a formal project contract is signed, and successfully implemented, it will have a positive impact on the company's business performance in 2017 and subsequent years. PPP orders continue to explode, and performance is rising steadily: taking into account the three projects that won the pre-bid this time, the company has signed new orders of 31,485 billion yuan since this year, about 7.4 times the total number of orders for the full year of 2016; of these, PPP projects amounted to 30.566 billion yuan, accounting for 97.08%. Since 2016, on-hand orders have reached 35.739 billion yuan, which is about five times the estimated revenue of 7.063 billion yuan in 2017. High performance growth is guaranteed. In addition, the company has signed 24 framework agreements this year, with a total amount of 41.15 billion yuan. There is strong confirmation of implementation, which is a strong guarantee for future order growth. The three projects that won the pre-bid this time accounted for 283.12% of the company's revenue in 2016, helping the company to stabilize its leading position in the ecological restoration industry and providing a strong guarantee for the company's future performance. Relying on government payments, the benefits are more secure: the three projects that the company has jointly pre-bid for this time are ecological PPP projects. Their implementation complies with the requirements of the government's “Guiding Opinions on Promoting the Government and Social Capital Cooperation Model in the Field of Public Services”, and the return mechanism is paid by the government, that is, the government can directly pay the company by evaluating the availability of project facilities, the usage volume and quality of products or services, and the required capital is directly linked to local finance. Therefore, compared to user-paid PPP projects and PPP projects that subsidize the feasibility gap, the benefits of the company's pre-bid projects are highly reachable. The market for sandy land management is large, and the company has broad development space: the construction of ecological civilization promotes the development of the sandy land management industry. In the 13th Five-Year Plan for Ecological and Environmental Protection, the area of sandy land to be treated in Inner Mongolia alone has reached 61.35 million mu. According to the treatment cost of 10,000 yuan/mu, the market space in this field has reached 6135-1227 billion yuan, and the industry space is extremely broad. Due to its specific geographical location and natural environment, Inner Mongolia can be called an important ecological barrier between Beijing, Tianjin, and Hebei. Relying on its geographical advantages, the company undertakes mostly local soil desertification treatment projects in Inner Mongolia. It is expected that the trillion-level ecological restoration market will continue to benefit the company's future performance. Moreover, its top level of ecological management technology and mature ecological restoration model have few competitors in the industry, so the company's future high growth is guaranteed. Financial forecast and valuation: The company is expected to achieve net profit of 1,07/15.25/2.161 billion yuan from 2017 to 2019, a year-on-year increase of 196.7%/51.5%/41.7%, corresponding EPS of 0.63/0.95/1.35 yuan. The current stock price corresponding to PE from 2017 to 2019 is 19.4/12.8/9.0 times, maintaining a “highly recommended” rating. Risk warning: PPP project expansion and implementation falls short of expectations, repayment risk, etc.