The synergy effect was initially reflected in the announcement issued by Qingshuiyuan on April 13. The consortium formed by the company and its subsidiary Zhongxu Environmental won the bid for the PPP project for a garbage factory with a total investment of 337 million yuan. After the company initially completed the layout of the entire industrial water industry chain at the end of 2017, it won the bid for the local large BOT project with Zhongxu Environmental's “Municipal Construction+Housing Construction General Contract” dual level qualification. Combined with the quarterly report's forecast of a 440%-470% increase in net profit, we expect the company's annual performance to continue to grow at a high rate. We maintain the forecast of the company's earnings of 1.11/1.34/1.61 yuan per share for 2018-2020. Referring to the average P/E of the comparable company in 2018, we gave 20-21x P/E, corresponding to a target price of 22.20-23.31 yuan/share, and maintain a “buy” rating. The winning bid for Jiyuan's local large-scale waste incineration project is expected to increase overall profits. Qingshuiyuan and its subsidiary Zhongxu Environmental jointly won the bid for the first phase closure of the Jiyuan Municipal Household Waste Harmless Treatment Plant and the PPP Project for Domestic Waste Incineration Power Generation. The project operates under the BOT model, with a construction period of 1 year and an operation period of 19 years. The total amount of the project is as high as 337 million yuan. If the project is successfully implemented after winning the bid, we expect it to have a positive impact on Qingshuiyuan's revenue in 2018. Assuming that the completion rate of the 18-year project is 50%, and the net interest rate during the construction period is 6%, the preliminary estimate is that it will bring the company a net profit of nearly 10 million yuan, accounting for about 9% of the company's net profit in '17, and will bring stable operating income after the later stages of the project are put into operation. Make full use of Zhongxu Environmental Construction's dual-level qualification and look forward to more synergy effects. In December '17, the company just completed the acquisition of 55% of Zhongxu Environmental's shares. In less than 4 months, the company joined hands with Zhongxu Environmental to win a major local order in Jiyuan City. The synergy effects of the merger and acquisition of Zhongxu Environmental were initially reflected. Given that Qingshuiyuan and its subsidiary have been deeply cultivated in Henan for many years, the subsidiary Ande Technology has been based in Shaanxi all year round, and local customer resources are expected to be fully exploited in the future. Qingshuiyuan's main water treatment agent business maintained a high level of prosperity in 18Q1, and cash flow was good. Zhongxu Environmental has a rare double level qualification for municipal construction and general contracting of housing construction. It is expected that in the future, it will receive more orders in regions where Qingshuiyuan's original customers were concentrated, such as Henan and Shaanxi. Maintaining profit forecasts, maintaining the “purchase” rating company's 18Q1 net profit is expected to increase 440%-470% year on year. The water treatment agent market remains high. The company's product prices have risen sharply, the water treatment agent sales collection period is short, and the cash flow is excellent. We expect the net profit of water treatment agents to reach more than 100 million yuan in 2018, and the industrial chain and regional synergy between mergers and acquisitions is gradually showing. Maintaining the previous forecast of the company's earnings of 1.11/1.34/1.61 yuan for 2018-2020, reference the comparable company's 2018 average P/E is about 20x, giving the company 20-21x P/E in 2018, corresponding to a target price of 22.20-23.31 yuan/share. Maintain a “buy” rating. Future catalysts include: the boom in water treatment agents has exceeded expectations, orders have exceeded expectations, and performance has exceeded expectations. Risk warning: Performance promises for mergers and acquisitions have not been fulfilled; the rapid expansion of investment projects has worsened cash flow.