Guide to this report: The company is also benefiting from US tax reform and oil price recovery. It is expected that tax cuts will increase net profit by 23%. Net profit will increase by 7-900 million yuan for every $10 increase in oil prices. The current market value corresponds to net profit of only 11 times PE in 2018. Investment points: Maintain an increase in holdings rating and maintain a target price of 4.9 yuan. We believe that the company has benefited from the rebound in oil prices and US tax reform, and its performance has ushered in explosive growth. We expect the company's net profit in 2017-19 after the merger to be 3.2/22.2/33.5 billion yuan, corresponding to an increase in EPS of 0.01/0.02/0.02 yuan before the merger to 0.05/0.33/0.49 yuan. If we consider the completion of 1.7 billion yuan of supporting financing in 2018 and an increase of 440 million yuan in share capital, EPS will rise to 0.05/0.31/0.46 yuan. Maintain an increase in holdings rating and maintain the target price of 4.9 yuan. US tax cuts of 15% increased performance by 23%. The company directly benefits from US tax reform, and cutting the federal income tax rate by 15% would increase the company's net profit by 23%. The current market value corresponds to a profit of only 11 times PE in 2018, and the margin of safety has increased significantly. Production is expected to double over the next 2 years, and oil prices are elastic between 700 and 900 million yuan. The company is speeding up the pace of drilling wells. The average daily output is expected to be 2.5/3.9/510,000 barrels in 2017-19, doubling in two years. Production is expected to peak at 100,000 b/d in 2025, and cash flow balance can be achieved in 2020. The company's oil prices are highly flexible, increasing net profit by 700 to 900 million yuan for every $10 price increase. catalysts. Oil prices have risen, US tax reform legislation has been passed, and companies have disclosed annual reports or performance forecasts. Risk warning: oil prices fluctuate greatly, and the exchange rate fluctuates greatly.