Key investment events: Yongqing Environmental Protection plans to acquire Kangbo Solid Waste through additional issuance; Yongqing Environmental Protection won the bid for a PPP project to rectify black and smelly water bodies and build supporting facilities in Jiahe County, with a total amount of 1.87 billion yuan (including 570 million yuan for heavy metal treatment). The acquisition of Kangbo Solid Waste made a strong entry into the hazardous waste sector in Jiangsu: Yongqing Environmental Protection plans to purchase 100% of Kangbo Solid Waste's shares held by Yongqing Group and Hangxiang Honghu by issuing shares, with payment consideration of 1,075 billion yuan. After the completion of this transaction, Kangbo Solid Waste became a wholly-owned subsidiary of Yongqing Environmental Protection. The target company promised to achieve net profit of 106 million yuan, 106 million yuan, 113 million yuan, and 120 million yuan in 17-20 years. Based on payment consideration, the corresponding valuation of the purchase price in 2017 was 10.1 times. This acquisition will enable Yongqing Environmental Protection to strongly enter the hazardous waste field in Jiangsu and achieve synergies with the environmental services of the original company. Kangbo Solid Waste has the ability to dispose of various types of hazardous waste, and the disposal technology is reliable and the capacity is stable. With the stricter national environmental policy, the unit price of hazardous waste disposal has increased rapidly, and the market prospects are broad, the company's hazardous waste disposal performance is expected to improve dramatically. Soil restoration technology advantages, recently won a large bid: the company completed the acquisition of IST in the US in 2015. Coupled with its own technology accumulation, the company has strong technical strength in the field of land restoration. Also, in January '18, the company won a bid for the Taojia River Basin Heavy Metal Pollution Comprehensive Treatment Project worth 570 million yuan (a sub-project of the PPP project for the remediation of black and smelly water bodies in Jiahe County and the construction of supporting facilities). Coupled with the 17-year order, it indicates that future performance improvements are guaranteed. The company obtained the environmental impact assessment grade A certificate, and the EIA consulting project grew rapidly: in August 2016, the company obtained the EIA grade A certificate. This qualification can help the company further improve its ability to undertake EIA consulting and give the company more room for growth in the field of EIA consulting services. Furthermore, in 14-16, EIA consulting achieved a compound annual growth rate of 123.6%, and in the first half of '17, EIA still achieved more than 100% growth. The company's EIA consulting performance is still expected to increase significantly in the future. Profit forecast and investment advice: The 2017-2019 EPS is expected to be 0.25 yuan, 0.48 yuan, and 0.61 yuan respectively; the company's performance growth rate is higher than that of companies in the same industry, and the valuation is relatively low (about 30 times the valuation of comparable hazardous waste companies), and for the first time, it has been given an “increase in holdings” rating. Risk warning: Competition increases risk, project progress falls short of expected risk, M&A matters progress or failure to meet expectations, risk of merger and acquisition companies' performance not meeting promises, etc.