Leading domestic fluid equipment, gradually laying out integrated turnkey business to help the company take off for the second time. Starting from manufacturing various high-end equipment such as compressors, steam turbines, and blowers, it gradually lays out various industries such as agricultural green energy and military markets. Currently, it has related engineering capabilities such as power island integration, air station integration, etc., and EMC operation qualifications, and can provide various services such as EPC turnkey, BOT, and BOO according to customer needs. The company's performance grew rapidly in the first three quarters of 2017. During this period, it achieved operating income of 1,076 billion yuan, an increase of 54.2% over the previous year, and achieved net profit of 100 million yuan, an increase of 100.1% over the previous year. The company's gross margin net margin is increasing year by year, expenses are well controlled, sales rates and management expense ratios are gradually being reduced, and financial expense ratios have risen slightly. The acquisition of Shanghai Yunneng and leveraging its collaborative advantages to increase the renewable energy power generation company recently announced that it intends to issue shares to purchase 100% of Shanghai Yunneng's shares. The transaction amount is 785 million yuan. At the same time, the company raised no more than 200 million yuan in supporting capital. After the transaction is completed, Shanghai Yunneng will become a wholly-owned subsidiary of the company. Shanghai Yunneng is a leading domestic supplier of complete equipment for waste heat power generation, biomass power generation and other energy and power projects, providing integrated energy system solutions and environmental protection integrated technology services. The acquisition of Shanghai Yunneng promised net profit not less than 51 million, 776.5 million, and 95 million yuan in 2017-2019. The company has advanced technical standards and sufficient orders, and is likely to achieve its performance promises in the future. The acquisition company is expected to use Shanghai Yunneng's rich project experience and customer resources in the field of energy power generation to enhance its competitive advantage in the field of renewable energy, and use the combination of the company's steam turbines and Shanghai Yunneng's environmentally friendly boilers to form a synergy effect in the field of waste heat power generation. The demonstration effect of the Gaoyou biogasification power project is obvious. In the future, we will vigorously promote the agricultural environmental protection industrial park holding company Linyuan Technology's 10MW biomass straw gasification power generation project, which was successfully connected to the grid on September 5, 2017. The project is a national 863 plan project. The demonstration effect is obvious, and the scale ranks among the highest in the country. The company actively promotes the agricultural environmental protection industrial park project, which is expected to become the company's main profit growth point in the future. The company estimates that under normal circumstances, the average arable land in one county is about 1 million mu, with an average treatment rate of about 50%, corresponding to 500,000 tons of straw disposal needs. The company mainly promotes the agricultural environmental protection industrial park project through two models: self-operated demonstration projects and seeking cooperation with local enterprises. The main revenue comes from power generation and by-product slow-release fertilizer, and the entire project has a recycling period of about 6 years. According to our statistics, the company signed a total of 4.735 billion yuan in framework agreements in 2017, which strongly guarantees the company's future performance. The company has a smooth layout from a high-end equipment supplier to a general system contractor. Currently, it has received many large orders, proving the market's recognition of the company's general contracting capabilities. In the future, the company is expected to rely on core equipment advantages to form a good synergy effect with Shanghai Yunneng, and significantly enhance the company's profitability through integrated services with differentiated competition. Profit forecast and investment rating: Without considering the impact of the acquisition of Shanghai Yunneng, the company's net profit for 2017-2019 is estimated to be 1.35, 2.32, and 371 million yuan, respectively, corresponding EPS of 0.26, 0.44, and 0.71, and PE is 60, 35, and 22 times, respectively. This is the first coverage, giving a “buy” rating. Risk warning: The promotion of clean energy power generation fell short of expectations, the acquisition of Shanghai Yunneng failed, and industry competition intensified.