Event: The company released the first quarter results forecast. The net profit for the first quarter is expected to be 43.1 million yuan to 47.5 million yuan, an increase of 98.26% to 118.5% over the previous year. A leading domestic fluid machinery manufacturer, cooperating in R&D and entering the distributed energy sector as a leading domestic fluid machinery manufacturer. In the context of the upgrading of the domestic manufacturing industry gradually replacing imports, the company is steadily consolidating its leading position in various high-end equipment manufacturing markets such as compressors, steam turbines, and blowers, while actively entering various industries such as agricultural green energy and military markets. The company's EPC project operation has reached a mature stage, and the steam turbine business is growing rapidly. Furthermore, the company is currently cooperating with ETI in the US to develop gas turbines, investing more than 3% in R&D, and plans to enter the distributed energy sector. We believe that the company can fully enjoy the rapid development of the renewable energy industry and rely on its advantages in the field of fluid equipment to achieve good synergy with the renewable energy power generation business. The acquisition of Shanghai Yunneng was launched to actively promote the agricultural and environmental protection industrial park project company's intention to issue shares to purchase 100% of Shanghai Yunneng's shares, with a transaction amount of 786 million yuan. Shanghai Yunneng is mainly engaged in the supply of complete equipment and technical services for energy and power projects such as industrial waste heat and pressure utilization and biomass power generation. Its business models include engineering contracting and contract energy management models. The acquisition of Shanghai Yunneng promised net profit not less than 51 million yuan, 776 million yuan, and 95 million yuan in 2017-2019 deducted from mother. According to the “Medium- and Long-Term Renewable Energy Development Plan” and the “13th Five-Year Plan” for biomass energy development, the country's installed capacity of biomass power generation will reach 15 million kilowatts in 2020, with an annual power generation capacity of 90 billion kilowatts, including 7 million kilowatts of direct combustion from agricultural and forestry biomass, 7.5 million kilowatts from urban domestic waste incineration, and 500,000 kilowatts of biogas. We believe that Shanghai Yunneng is expected to fully benefit, and as of mid-December 2017, Shanghai Yunneng is currently executing orders worth more than 2 billion yuan, and it is likely that it will fulfill its performance promises in the future. The company actively promotes agricultural environmental protection industrial park projects, mainly using two models: self-operated demonstration projects and seeking cooperation with local enterprises. The main revenue comes from slow-release fertilizer, a by-product of carbon ash after power generation and gasification. The entire project has a payback period of about 6 years. After the Gaoyou project was gradually implemented, the company also signed a cooperation framework with the Anda Municipal Government. We believe that the county agricultural and environmental protection industrial park may become the company's main profit growth point in the future. Profit forecast and investment rating: We believe that as a leading domestic fluid machinery manufacturer, the company has mastered high-end core technology, and the innovative model of agricultural environmental protection industrial parks has achieved certain results. In a context where the company has sufficient orders and Shanghai Yunneng's performance promises are likely to be fulfilled, we believe that the company can expect future development and is expected to continue to develop rapidly. Without considering the increase in performance due to the merger of transportation capacity, the company's net profit for 2017-2019 is estimated to be 1.36, 2.34 million yuan, and 373 million yuan, respectively, corresponding EPS of 0.24, 0.42, and 0.67 yuan, respectively, and PE of 62, 36, and 23 times, respectively, maintaining the purchase rating. Risk warning: Clean energy power generation promotion falls short of expectations, order execution falls short of expectations, and industry competition intensifies.