Acquire the high-quality assets of Kangbo solid waste, enter the hazardous waste industry, and improve the industrial layout Yongqing Environmental Protection plans to issue a total of 107 million shares to the controlling shareholders Yongqing Group and Hangxiang Honghu at a price of 10.02 yuan/share to purchase 100% of Kangbo Solid Waste's shares at a price of 1,075 million yuan; the target company promises to deduct non-net profit of 1,06.1296 million yuan, 1,0560.84 million yuan and 11,28794 million yuan respectively in 2017-2019. Based on the promised results in 2017, the acquisition of PE was 10.1 times higher. Kangbo has an annual disposal capacity of 38,000 tons of solid waste, and can dispose of 17 out of 46 categories. The underlying assets are of high quality: ① The regional advantages are obvious. Kangbo Solid Waste is located within the Changshu Economic Development Zone. It is the only hazardous waste incineration disposal enterprise in Changshu City. The Changshu Economic Development Zone is a national economic and technological development zone focusing on chemical, pharmaceutical, automobile and other industries, providing stable hazardous waste sources and market channels for Kangbo solid waste. In addition, there is a difference in hazardous waste disposal prices between northern Jiangsu, central Jiangsu, and southern Jiangsu. Kangbo solid waste is located in southern Jiangsu, where hazardous waste disposal prices are high, and has a good bayonet advantage. ② Has stable operation experience, high capacity utilization, and stable profit. The core competency of the hazardous waste industry lies in operation and management capabilities. Kangbo Solid Waste has experience in stable operation, and the capacity utilization rate has stabilized at over 90% since it was fully put into operation in 2015. The current acquisition of Kangbo Solid Waste can supplement the company's industrial chain, create strong collaboration with the company's original business, and the prototype of a comprehensive solid waste platform is beginning to take shape. The “Soil Pollution Prevention and Control Law” was submitted to the National People's Congress for first review on June 22, 2017, and the draft was announced for comment by the public on June 22, 2017. With the enactment and implementation of the Soil Law, the soil restoration industry will enter a period of rapid development. Yongqing Environmental Protection has a pioneering advantage in the field of soil restoration. Relying on the rich soil restoration and treatment experience and leading technical strength of the American IST company, it is actively laying out the “big soil” strategy, and future development can be expected. Environmental consulting has grown rapidly, and the new energy business has become an important performance support. In August 2016, the company's EIA qualification was successfully upgraded; in July 2017, the company's EIA qualification expansion was passed, and overall qualification capacity was at the forefront of the market; in the first half of 2017, the environmental consulting business achieved rapid growth of more than 100%. At the same time, the company actively entered the field of new energy power generation. In the first half of 2017, Yongqing Ainengsen New Energy brought the company 114 million operating income, accounting for 17.51% of total revenue, which became an important complement to the company's performance. Profit forecast We estimate that the company's net profit for 2017-2019 will be 1.56/3.35/448 million yuan. Considering that the EPS corresponding to the increase in dilution is 0.24/0.44/0.58, and the corresponding PE is 41/23/17 times, giving it a “buy” rating.