Key investment events: Chairman Zhu Lianyu of the company increased his holdings by 356,000 shares, with an average transaction price of 5.3 yuan. According to Dongfangcai.com data, as of February 14, 2018, the company chairman Zhu Lianyu increased his holdings by 356,000 shares through the secondary market, with an average transaction price of 5.3 yuan. Comment: The increase in executive holdings shows confidence in the company's development. This time, the company's chairman increased his holdings at a time when the A-share market plummeted due to the external market environment, showing that executives are full of confidence in the company's future development. The company ranked first in global container crane orders for many years. The gross margin of the container crane business continued to rise in recent years, reaching 23.5% in 2016. As global trade picked up, demand for HAECO improved, and the company's profit trend was positive. From January to September 2017, the company achieved operating income of 15.2 billion yuan, a year-on-year decrease of 17%, and realized a net profit of 170 million yuan to mother, an increase of 10% over the previous year. The upward shift in the international oil price center is expected to drive the oil and gas equipment and service industry to rebound from the bottom of about 26 US dollars/barrel in early 2016. International oil prices continued to fluctuate and rise, continuously consolidating the price center, and once broke through the 70 US dollar mark in January. Recently, the spot price of oil has declined somewhat, but it is still stable above $60. If oil prices stand on the platform of 60-70 US dollars/barrel, the oil and gas equipment and service sector is expected to gradually move from investment in the theme of rising oil prices to fundamental investment, which is expected to usher in strategic investment opportunities similar to the recovery of construction machinery in 2016. The company's offshore equipment risks have been cleared, and China Communications Construction's convertible bond project is expected to provide greater performance flexibility. The company accrued asset impairment losses of 165 million yuan in the first three quarters of 2017, a sharp reduction from 600 million yuan in asset impairment losses in the same period last year. Since 2010, total asset impairment amounts to over 4.2 billion yuan. We believe that the impairment of the company's offshore equipment assets has been fully calculated, the risks have been cleared, and it is expected to provide greater performance flexibility in the future. China Communications Construction issued 20 billion yuan of convertible bonds, of which 2.46 billion yuan is intended to be used to purchase construction ships and other equipment. Zhenhua Heavy Industries has a core competitive advantage in many engineering ship projects. China Communications Construction's convertible bond project is expected to help boost the performance of Zhenhua Heavy Industries' offshore equipment sector. The controlling shareholder changed to CCCC Group, and the state-owned enterprise reform is expected to accelerate the transfer of a total of 1.32 billion shares (accounting for 29.99% of the company's share capital) to CCCC Group and its subsidiaries, the controlling shareholder of the company through an agreed transfer agreement. After the equity change, the controlling shareholder of the company changed from CCCC Group to CCCC Group. CCCC Group is one of the pilot units of state-owned capital investment companies. As Zhenhua Heavy Industries changes from CCCC Group's Sun Company to a subsidiary, group-level state-owned enterprise reform may accelerate. Investment advice: The company is the global leader in HAECO and has ranked first in the HAECO market share for many years. In recent years, it has continued to make efforts in marine engineering, investment and other business fields, forming good synergy effects in all major business fields. With the recovery of the global economy and trade, the profit level of the company's HAECO business has improved. Relying on CCCC Group to undertake major infrastructure projects at home and abroad, benefiting from “Belt and Road” port construction and PPP investment. After extensive asset depreciation in recent years, the company's offshore risk release has been sufficient, asset quality has improved markedly, and has a high margin of safety. We judge that the company's performance is expected to exceed market expectations. EPS is expected to be 0.07/0.10/0.14 yuan in 2017-2019, and the corresponding PE is 76/54/38 times. Maintain an “Overweight” rating. Risk warning: Risk of downturn in offshore equipment business; risk of global trade falling short of expectations; risk of state-owned enterprise reform falling short of expectations.