It is proposed to acquire the natural gas producer Zhonghui Vobang and build a dual main company of natural gas and horticultural supplies to acquire 48.88% of the shares of the natural gas extraction company Zhonghai Vobang at a price of about 2.2 billion yuan by issuing shares in cash and issuing shares. After the acquisition is completed, the company will hold 50.36% of Zhonghai Wobang's shares and achieve control. CNOOC Wobang shareholders promised to achieve net profit of not less than 309.6 million yuan, 362.2 million yuan, 454.5 million yuan, and 555.6 million yuan in 2017, 2018, 2019, and 2020, respectively. After the transaction is completed, the company will form the dual main business of natural gas extraction and sales and gardening supplies manufacturing. CNOOC Wobang — A natural gas producer that is about to explode in production, Zhonghai Wobang is an upstream natural gas mining enterprise. It has now signed a “cooperation contract” with CNPC Coalbed Methane Company (CNPC) to obtain the right to explore, develop, produce and operate natural gas for 1,524 square kilometers in Shilou West Block for 30 years. It mainly produces dense sandstone gas (a type of natural gas), and has now proven geological reserves of 127.6 billion square meters. Currently, only the Yonghe 18 well area (154 square kilometers) has entered commercial mining. The company's mining volume is expected to reach 630 million square meters in 17 years. It is expected that by the end of 2018, the Yonghe 45 well area will be registered and commercialized. At that time, Zhonghai Wobang's production scale will grow to 1.2 billion square meters/year. In the future, with the continuous development of the Shilou West Block, CNOOC Vobang's production scale will continue to expand. The market capitalization is low, the valuation is high, and it is in a rapidly developing industry. With extremely high barriers, it is expected that China's natural gas supply and demand will maintain a tight balance in the next few years, and the value of upstream natural gas resources will become more and more prominent. CNOOC's production scale in the Shilou West Block will continue to grow. Using CNPC's sales channels, the newly extracted natural gas will be sold smoothly. Furthermore, CNPC Coalbed Methane still has a large number of undeveloped blocks, and it is not ruled out that CNOOC and CNPC will continue to cooperate in other blocks in the future. Assuming that CNOOC can be combined for the full year in 2018, we expect the company to achieve net profit of 200 million/270 million in 2018-2019. The market value of the company is expected to be only 3.8 billion after completing the additional sales increase, corresponding to 19 times/14 times the valuation. The company has a small market capitalization, undervaluation, and high growth. It is in the gas industry where policies support the industry's rapid rise, and upstream gas resources have high barriers and are covered for the first time, giving it a “highly recommended” rating. Risk warning: risk of unsuccessful restructuring; gas block filing or extraction falling short of expectations; gas industry policy risk