Key investment points The installed capacity of domestic photovoltaics in the first three quarters of 2017 surpassed that of last year, and distributed photovoltaics increased nearly 4 times over the same period last year. In the first half of 2017, the PV industry added 24.4 GW of installed capacity, an increase of 9% over the previous year, of which distributed photovoltaics was 7.11 GW, an increase of 2.9 times over the previous year. The popularity of the third quarter was unabated. By the end of the third quarter, China's PV's new installed capacity had reached 43 GW, which had already exceeded the installed capacity for the whole of last year. Among them, photovoltaic power plants were 27.7 GW, an increase of 3% year on year; distributed photovoltaic power plants were 15.3 GW, an increase of nearly 4 times year on year. By the end of September, the country's installed photovoltaic power generation had reached 120 GW, including 94.8 GW of photovoltaic power plants and 25.62 GW of distributed photovoltaics. The main reason why the installed capacity of photovoltaics continues to exceed expectations is the explosive growth of distributed photovoltaics. In the medium to long term, domestic PV installations will remain high: in July 2017, the National Energy Administration issued the “Guiding Opinions on the Implementation of the 13th Five-Year Plan for Renewable Energy Development”. The plan indicates that the new construction scale for the period 2017-2020 will be 86.5 GW in 4 years, of which the PV leader project target is 8 GW per year. Considering that this plan does not include distributed photovoltaic power generation projects of unlimited construction scale, the installed capacity is expected to continue to exceed expectations against the backdrop of high growth in distributed photovoltaics. The country demands that the problem of water abandonment, wind disposal and light disposal be resolved as soon as possible, and the photovoltaic and wind power boom is improving. In November 2017, the National Development and Reform Commission and the National Energy Administration issued the “Implementation Plan to Solve the Problem of Water Disposal, Wind and Light Disposal”, which clearly takes effective measures to improve the level of renewable energy utilization and promote solutions to the problem of wasted water, wind and light. From January to September 2017, Tianwo Technology achieved revenue of 9.015 billion yuan, an increase of 814% over the previous year; net profit to mother was 206 million yuan, an increase of 469% over the previous year. 2017 full-year results are expected to increase: 270 million yuan - 350 million yuan. By the end of June 2017, the company had orders of 18.3 billion yuan to ensure rapid growth in performance this year and next year. The subsidiary China Electric Power had high performance growth in the first half of this year; we are optimistic that China Electric will benefit from the photovoltaic and wind power boom. China Machinery Electric completed operating revenue of 5.781 billion yuan in the first half of the year, up 154% year on year; realized net profit of 247 million yuan, up 55% year on year. China Electric Power is a leading domestic energy construction service turnkey. It has undertaken a large number of domestic and foreign power engineering design and general contracting services such as cogeneration, photovoltaic power generation, biomass power generation, waste power generation, power transmission and transformation, and wind power generation. Among them, the photovoltaic business achieved good results in the first half of the year. Tianwo Technology completed the acquisition of 80% of China Electric Power's shares in cash for 2.9 billion dollars in 2016, and completed the payment after achieving results in 5 installments. China Machinery & Electric Power: Electric Power Engineering EPC ranks in the top 5 in China. After taking control of China Machinery Electric Power, the power engineering, new energy and clean energy turnkey business became the core pillar of the company. China Machinery Electric Power promised to deduct non-net profit of not less than 376 million, 415 million, and 456 million yuan in 2017-2019. The non-public offering progressed smoothly: The company promoted the use of Yumen Xinneng Photothermal First Electric Power Co., Ltd. as the implementing entity to raise no more than 1,572 billion yuan in non-public investment to invest in a 50,000 kilowatt photothermal power generation project with a secondary reflection molten salt tower. At present, the company's administrative license application materials have been accepted by the China Securities Regulatory Commission. The company and Zhejiang Gold Trust signed a strategic cooperation framework agreement on May 5, 2017. From April 6 to April 14, Zhejiang Gold Trust increased its holdings of the company's shares by 36,788,143 shares, accounting for 5.00% of the company's total share capital, which is equivalent to Zhejiang Gold Trust upgrading from a “financial investor” to a “strategic investor”. Traditional business: coal chemical equipment bottomed out and rebounded, and the trend of nuclear power and new materials was rising. Recently, the coal chemical and petrochemical industries have picked up, and orders for the company's coal chemical equipment and petrochemical equipment have begun to recover. It is expected that the company's traditional business will turn a loss into a profit in 2017. The company's improved T-SEC coal high-efficiency clean energy technology has great environmental advantages, and the future market prospects are good. Tianwo Technology's 2017-2019 performance is estimated to be 320 million yuan, 4.7 billion yuan, and 6.2 billion yuan. The current market value is about 6.1 billion yuan, corresponding to PE 19/13/10 times, and PE 13 times in 2018; maintaining the “buy” rating. Risk warning: risk of bad debts in accounts receivable, risk of declining demand for traditional business such as coal chemical/petrochemical equipment, risk of transformation to military industrialization, risk of medium engine power order execution.