Project: Yongqing Environmental Protection, as the leader of the consortium, formed a consortium with Hunan Yongqing Water Management Co., Ltd. and Hunan Yeda Construction Co., Ltd. and won the bid for the “Jiahe County Black and Smelly Water Remediation and Supporting Facilities Construction PPP Project”. The total proposed investment of the project was about 1,869 billion yuan. Comment: The consortium won a large bid of 1,869 million dollars, boosting high performance growth. Yongqing Environmental Protection and the holding subsidiary Hunan Yongqing Water Business and Hunan Yeda Construction Co., Ltd. jointly won the bid for the 1,869 billion Jiahe County PPP project. The project mainly includes two sub-projects: ① The black and smelly water remediation project: a total of 1,270 billion yuan. These include the comprehensive treatment of black and smelly water bodies in Jiahe (project scale is about 101 million yuan), the urban rain and dirt diversion upgrading project (project scale is about 224 million yuan), the Taojia River Basin heavy metal pollution comprehensive treatment project (project scale is about 570 million yuan), and the Sponge City Demonstration Zone construction project (project scale is about 375 million yuan). The cooperation period is 15 years (including 2 years of construction). ② Urban and rural sewage treatment projects, with a project scale of about 599 million yuan. Including urban and rural sewage treatment plants and supporting pipeline network construction projects (construction of one sewage, two sewage plants and supporting pipelines; construction projects for township sewage treatment facilities), etc., the cooperation period is 30 years (including the construction period of one year for individual projects). This time, the winning bid was a project company (SPV) jointly established by the consortium and the funder Jiahe Zhudu Development Group Co., Ltd. (Zhudu Group) commissioned by the Jiahe County People's Government (SPV). The capital of the project company is about 373.8 million yuan, and the loan ratio is 80%. As the consortium leader, Yongqing Environmental Protection is responsible for project leadership, investment and financing, and overall project design; Yongqing Water Administration and Yeda Construction are responsible for engineering design, construction and operation within the corresponding qualifications. The project will operate under the DBFOT (design-construction-finance-operate-transfer) model. It is expected that winning the bid this time will provide the company with more experience in developing businesses such as heavy metal pollution control in watersheds and boost performance growth. Acquire high-quality hazardous waste assets and improve industrial layout. The company plans to acquire Kangbo Solid Waste, a hazardous waste standard, with 10 times PE. Kangbo has an annual disposal capacity of 38,000 tons of solid waste, and can dispose of 17 types of hazardous waste 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. ② Has stable operation experience and high capacity utilization. Kangbo Solid Waste has experience in stable operation. Since full production was put into operation in 2015, the capacity utilization rate has been stable at around 90%. 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. Deeply cultivate soil restoration and build a strategic core for the future. Currently, China's soil restoration accounts for less than 0.01% of domestic GDP, far below the development level of 0.3% of the European and American markets. 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 treatment experience and leading technical strength of IST in the US, it is actively laying out the “big soil” strategy, and future development can be expected. The profit forecast is based on the company's development strategy. Future endogenous development will focus on soil, and epitaxial expansion will focus on hazardous waste. At the same time, the new energy and atmospheric treatment business will also be a strong performance support. 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 additional dilution is 0.24/0.44/0.58 yuan, we give it a “buy” rating.